<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal Year Ended January 25, 1997
Commission File Number 1-5674
--------------------
ANGELICA CORPORATION
(Exact name of registrant as specified in its charter)
Missouri 43-0905260
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
424 South Woods Mill Road 63017-3406
Chesterfield, Missouri (Zip Code)
(Address of principal executive offices)
(314) 854-3800
Registrant's telephone number, including area code
--------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- ------------------------------------- --------------------
Common Stock, $1.00 Par Value New York Stock Exchange
Preferred Stock Purchase Rights issuable pursuant to
Registrant's Shareholder Protection Rights Plan New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No----
------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
------
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant. The aggregate market value shall be computed by reference
to the price at which the stock was sold, or the average bid and asked prices
of such stock, as of a specified date within 60 days prior to the date of
filing.
$161,312,544 April 7, 1997
- -------------------------- ------------------------
Value Date of Valuation
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of April 7, 1997.
Common Stock, $1.00 par value, 9,146,789 shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
1) Portions of the Annual Report to Shareholders for year ended 1/25/97 are
incorporated in Parts I, II & IV; 2) Portions of the Proxy Statement dated
4/16/97 are incorporated in Part III.
<PAGE> 2
PART I
------
Item 1. Business
- -----------------
GENERAL DEVELOPMENT OF BUSINESS
Angelica Corporation (the "Company") and its subsidiaries provide products and
services to a wide variety of institutions and individuals, which are in
primarily three markets: health services, hospitality and other service
industries. The Company was founded in 1878 and was incorporated as Angelica
Corporation in 1968.
The Company's businesses are reported in three industry segments: Textile
Services, Manufacturing and Marketing and Retail Sales. Information about the
Company's industry segments appears on page 27 of the Company's Annual Report
to Shareholders for the year ended January 25, 1997 (hereinafter "Annual
Report") and is incorporated herein by reference. This information includes
for each segment sales and textile service revenues, earnings, identifiable
assets, depreciation and capital additions for each of the five years in the
period ended January 25, 1997.
Textile Services
- ----------------
This segment has 34 plants generally in or near major metropolitan areas in
the United States principally providing textile rental and laundry services
for health care institutions, presently servicing approximately 1,000
institutions with approximately 161,000 beds. This segment also provides
general linen services in selected areas, principally to hotels, casinos,
motels and restaurants.
The markets in which the Textile Services segment operates are very
competitive, being characterized by a large number of independent,
privately-owned competitors. Industry statistics are not available, but the
Company believes that its Textile Services segment constitutes the largest
supplier of textile rental and laundry services to health care institutions in
the United States. Competition is on the basis of quality, reliability and
price.
Manufacturing and Marketing
- ---------------------------
The Company's Manufacturing and Marketing operations consist of Angelica
Image Apparel in the United States and smaller operations in Canada and the
United Kingdom, collectively engaged in the manufacture and sale of uniforms
and business career apparel for a wide variety of institutions and businesses.
The raw materials used by Angelica Image Apparel in the conduct of its
business consist principally of textile piece goods, thread, and trimmings,
such as buttons, zippers and labels. The Company purchases piece goods from
most major United States manufacturers of textile products. These materials
are available from a number of sources.
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<PAGE> 3
The Manufacturing and Marketing operations compete with more than four dozen
largely privately-owned firms, including divisions of larger corporations, in
the United States, Canada and England. Competition is also provided by local
firms in most major metropolitan areas. The nature and degree of competition
varies with the customer and market where it occurs. Industry statistics are
not available, but the Company believes that it is the leading supplier of
garments to hospitals, hotels and motels, and food service establishments and
one of the leading suppliers of uniforms to textile service suppliers in the
United States. Competition is extensive and is based on many factors,
including design, quality, consistency of product, delivery, price and
distribution.
Retail Sales
- ------------
The Retail Sales segment is a specialty retailer offering uniforms and duty
shoes primarily for nurses and other health care professionals through a
nationwide chain of 286 retail stores under the name of Life Uniform and Shoe
Shops, located primarily in malls and strip shopping centers.
The Company believes there are approximately 2,500 specialty retail stores in
the U.S., primarily privately-owned, offering merchandise comparable to that
offered by the Company's Retail Sales segment. In addition, such merchandise
is also offered by others, including some large apparel retailers. Retail
operations are conducted under highly competitive conditions in the local area
where each of the Company's stores is located, with competition being on the
basis of store location, merchandise selection and value. Industry statistics
are not available, but the Company believes its Retail Sales segment is the
nation's largest specialty retailer offering uniforms and duty shoes to nurses
and other health care professionals.
Additional Information
- ----------------------
The Company does not hold any material patents, licenses, franchises or
concessions. It does not consider its business to be seasonal to any
significant extent. The Manufacturing and Marketing business is characterized
by high working capital requirements in the form of inventories required to
satisfy the prompt delivery requirements of its customers. Otherwise, the
Company has no unusual working capital requirements. No segment of the
Company's business is dependent on a single customer or a few customers.
Since the bulk of the Company's sales are to institutional users which buy on
a regular recurring basis, the Company's backlog of orders at any given time
consists principally of firm orders in the process of being filled and is not
considered significant to the Company's business. No portion of the Company's
business is subject to renegotiation of profits or termination of contracts at
the election of the government.
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<PAGE> 4
Research and Development
- ------------------------
Angelica Image Apparel carries on research, development and testing programs
both internally and in cooperation with independent laboratories and research
institutions, and works with suppliers to develop specialized fabrics to
improve performance and to meet specific technological requirements. The
dollar amount spent is not significant.
Environmental Considerations
- ----------------------------
The Company does not expect any material expenditures will be required in
order to comply with any Federal, state or local environmental regulations.
Employees
- ---------
The Company employs approximately 10,100 persons (including approximately 850
part-time employees).
Financial Information about Foreign and Domestic Operations and
Export Sales
- ---------------------------------------------------------------
The information required by this Item is hereby incorporated by reference to
Note 10 of "Notes to Consolidated Financial Statements" appearing on page 27
of the Company's Annual Report to Shareholders for the year ended January 25,
1997.
Item 2. Properties
- -------------------
The Company's real estate, both owned and leased, which is used in its
Manufacturing and Marketing segment, at January 25, 1997 was comprised of 18
manufacturing plants in the United States, one plant in Costa Rica, and one
plant in Great Britain, plus appropriate warehouses and sales facilities in
the United States, Canada and the United Kingdom. As of January 25, 1997, 34
laundries plus warehouse facilities located in 16 states were used in the
Textile Services segment, and 286 retail specialty stores located in 36 states
were used in the Retail Sales segment. In the opinion of the Company, all
such facilities are maintained in good condition and are adequate and suitable
for the purposes for which they are used. The manufacturing facilities are
normally fully utilized and operate generally on a one-shift basis. Laundry
facilities generally are not fully utilized, although some of them operate on
a multi-shift basis. The Company estimates that output of these facilities
could be increased by 20 percent with existing equipment by working longer
hours and by an additional 25 percent (for a total of 45 percent) by working
longer hours plus installation of additional equipment. As a part of the
restructuring plan adopted in January, 1996, the Company is in the process of
closing certain of its laundries and transferring the volumes being processed
in those plants to other of the Company's laundries, thereby achieving
economies of scale and greater
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<PAGE> 5
efficiencies in operation. In addition, as part of the restructuring plan
three other laundries are being replaced by the construction of new facilities
nearby. One of those replacement facilities has been completed and is in
operation, and the other two were under construction at January 25, 1997. A
substantial portion of the real estate utilized by the Company is leased.
Capitalized leases, primarily utilized by the Manufacturing and Marketing
segment, represent approximately 1% of the net book value of all fixed assets
at January 25, 1997. No difficulty in renewing leases which expire in the
near future is anticipated by the Company.
Real estate which is owned by the Company is approximately 52% of the net
book value of all fixed assets. There is no individual parcel of real estate
owned or leased which is of material significance to the Company's total
assets.
Item 3. Legal Proceedings
- --------------------------
The Company is not a party, and none of its property is subject, to any
material pending legal proceeding other than ordinary routine litigation
incidental to the business. Management believes that liabilities, if any,
resulting from pending routine litigation in the ordinary course of the
Company's business should not materially affect the financial condition or
operations of the Company.
Item 4. Submission of Matters to Vote of Security Holders
- ----------------------------------------------------------
No matters were submitted to a vote of shareholders during the fourth quarter
of the Company's year ended January 25, 1997.
<TABLE>
Executive Officers of the Registrant
- ------------------------------------
<CAPTION>
Present Position (and Year First
Prior Offices During Past Elected As
Name Five Years) <F1><F2> An Officer Age
---- ------------------------- ---------- ---
<S> <C> <C> <C>
Lawrence J. Young <F3> Chairman of the Board, 1975 52
President, Chief Executive
Officer and Director;
President, Angelica Image
Apparel, a division of Angelica
Corporation
Theodore M. Armstrong Senior Vice President- 1986 57
Finance and Administration
and Chief Financial Officer
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<PAGE> 6
Jill Witter Vice President, General Counsel 1985 42
and Secretary
L. Linden Mann Controller and Assistant 1978 57
Secretary
Thomas M. Degnan <F4> Treasurer 1993 41
Michael E. Burnham <F5> Vice President; President, 1993 45
Life Uniform and Shoe Shops,
subsidiaries of Angelica
Corporation
Alan D. Wilson <F6> Vice President; President, 1995 54
Angelica Textile
Services, subsidiaries of
Angelica Corporation
<FN>
<F1> Except as set forth below, the principal occupations of the officers
throughout the past five years have been the performance of
the functions of the offices shown above.
<F2> All officers serve at the pleasure of the Board of Directors.
<F3> In addition to being Chairman of the Board, Chief Executive Officer and
President of the Company, Lawrence J. Young has been
President of Angelica Image Apparel, a division of Angelica
Corporation, since March 12, 1996.
<F4> Thomas M. Degnan has been Treasurer of the Company since March 30, 1993.
He was Assistant Treasurer from May 23, 1989 to March 30,
1993.
<F5> Michael E. Burnham has been a Vice President of the Company since
May 25, 1993 and President of Life Uniform and Shoe Shops since
August 1, 1990.
<F6> Alan D. Wilson has been a Vice President of the Company and
President of Angelica Textile Services since March 15, 1995.
Prior to that he was, and continues to be, President of the
Eastern Division of Angelica Textile Services.
</TABLE>
None of the executive officers of the Company are related to each other.
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<PAGE> 7
There are no arrangements or understandings between any executive officer of
the Company and any other person pursuant to which such officer was selected.
-6-
<PAGE> 8
PART II
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Item 5. Market for Registrant's Common Equity and Related
- ----------------------------------------------------------
Stockholder Matters
- -------------------
The information required by this item is included under the caption "Common
Stock Data" on page 29 of the Company's Annual Report and is incorporated
herein by reference. The number of shareholders of record was 1,483 at April
7, 1997. The Company's Board of Directors regularly reviews the dividends
paid, and the Company expects to continue to pay dividends. However, there
can be no assurance that dividends will be paid in the future since they are
dependent on earnings, the financial condition of the Company and other
factors.
Item 6. Selected Financial Data
- --------------------------------
The information required by this item is included under the caption "Financial
Summary-11 Years" on pages 30 and 31 of the Company's Annual Report and is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
- ----------------------------------------------------------
Condition and Results of Operations
- -----------------------------------
The information required by this item is included in the text contained under
the caption "Financial Review" on pages 17 and 18 of the Company's Annual
Report and is incorporated herein by reference. The Company does not believe
the effects of inflation and changing prices have been, or will be, material
to the Company's results of operations.
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
The information required by this item appears on pages 19 through 28 of the
Company's Annual Report and is incorporated herein by reference. The
financial statement schedule listed at Item 14(a)(2) is incorporated herein by
reference.
Item 9. Changes in and Disagreements With Accountants on
- ---------------------------------------------------------
Accounting and Financial Disclosure
- -----------------------------------
Not Applicable.
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<PAGE> 9
PART III
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Item 10. Directors and Executive Officers of the Registrant
- ------------------------------------------------------------
Information with respect to Directors of the Company under the captions
"Information About Nominees for Directors" and "Information About Directors
Continuing in Office," on page 3 of the Company's Proxy Statement for the
Annual Meeting of Shareholders to be held on May 28, 1997, (hereinafter "Proxy
Statement") is incorporated herein by reference. Information with respect to
executive officers of the Company appears under the caption "Executive
Officers of the Registrant" on pages 4 and 5 of Part I of this Form 10-K.
Item 11. Executive Compensation
- --------------------------------
Information with respect to executive compensation under the captions
"Compensation of Directors and Other Information Concerning the Board and its
Committees" on pages 3 and 4, "Summary Compensation Table" on page 7, "Option
Grants in Last Fiscal Year" on page 8, "Aggregated Option Exercises in Last
Fiscal Year and Fiscal Year-End Option Values" on page 9, "Employment
Contracts and Termination of Employment and Change-In-Control Arrangements" on
pages 9 through 11, and "Pension Plan" on page 13 of the Company's Proxy
Statement is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
Information with respect to security ownership of certain beneficial owners
and management under the caption "Beneficial Ownership of the Company's
Securities" on pages 5 and 6 of the Company's Proxy Statement is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions
- --------------------------------------------------------
Not applicable.
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<PAGE> 10
PART IV
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Item 14. Exhibits, Financial Statement Schedules, and Reports on
- -----------------------------------------------------------------
Form 8-K
- --------
<TABLE>
<CAPTION>
Annual Report
(a) Document List Page
------------- -------------
<S> <C>
1. Financial Statements
--------------------
The following financial statements are
incorporated by reference herein and in
Item 8 above from the Company's Annual Report
to Shareholders for the year ended
January 25, 1997:
(i) Consolidated Statements of Income - 19
Years ended January 25, l997,
January 27, 1996 and January 28, 1995
(ii) Consolidated Balance Sheets - January 20
25, 1997 and January 27, 1996
(iii) Consolidated Statements of Share- 21
holders' Equity - Years ended
January 25, 1997, January 27, 1996,
and January 28, 1995
(iv) Consolidated Statements of Cash Flows- 22
Years ended January 25, 1997, January 27,
1996, and January 28, 1995
(v) Notes to Consolidated Financial State- 23-28
ments
(vi) Report of Independent Public 29
Accountants
</TABLE>
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<PAGE> 11
2. Supplementary Data and Financial Statement Schedule
---------------------------------------------------
(i) The supplementary data entitled
"Unaudited Quarterly Financial Data"
is incorporated by reference herein
and in Item 8 above from page 28 of
the Company's Annual Report.
(ii) The following financial statement schedule
is submitted as a separate section
of this report beginning at page 13:
Schedule II - Valuation and Qualifying
Accounts - For the Three Years Ended
January 25, 1997
All other schedules are not submitted because they are not applicable or not
required or because the information is included in the financial statements or
notes thereto.
(iii) Report of Independent Public Accountants on Schedule II
appears at page 12 of the Form 10-K.
3. Exhibits
--------
See Exhibit Index on pages 14-18 hereof for a list of all
management contracts, compensatory plans and arrangements
required by this item (Exhibit Nos. 10.1 through 10.34) and
all other Exhibits filed or incorporated by reference as a
part of this report.
(b) Reports on Form 8-K
-------------------
The Registrant filed no reports on Form 8-K during the last quarter of
the year ended January 25, 1997.
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<PAGE> 12
SIGNATURE
---------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this annual report to be signed on
its behalf by the undersigned thereunto duly authorized.
ANGELICA CORPORATION
---------------------------------------
(Registrant)
By: /s/ L. J. Young
------------------------------------
L.J. Young
Chairman of the Board,
President and Chief Executive
Officer (Principal Executive
Officer)
Date: April 22, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
By: /s/ T. M. Armstrong By: /s/ L. Linden Mann
------------------------------- -------------------------------------
T. M. Armstrong L. Linden Mann
Senior Vice President- Controller
Finance and Administration (Principal Accounting Officer)
and Chief Financial Officer
(Principal Financial Officer)
Earle H. Harbison, Jr. <F*> Leslie F. Loewe <F*>
- ---------------------------------- ----------------------------------------
(Earle H. Harbison, Jr.) (Leslie F. Loewe)
Director Director
Charles W. Mueller <F*> William A. Peck <F*>
- ---------------------------------- ----------------------------------------
(Charles W. Mueller) (William A. Peck)
Director Director
Elliot H. Stein <F*> William P. Stiritz <F*>
- ---------------------------------- ----------------------------------------
(Elliot H. Stein) (William P. Stiritz)
Director Director
H. Edwin Trusheim <F*>
- ----------------------------------
(H. Edwin Trusheim)
Director
By his signature below, L.J. Young has signed this Form 10-K on behalf of each
person named above whose name is followed by an asterisk, pursuant to power of
attorney filed with this Form 10-K.
/s/ L.J. Young
-------------------------------------
L.J. Young, as attorney-in-fact
Date: April 22, 1997
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<PAGE> 13
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To Angelica Corporation:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in the Annual Report to
Shareholders of Angelica Corporation and subsidiaries incorporated by
reference in this Form 10-K, and have issued our report thereon dated March
11, 1997. Our audit was made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed in Item 14(a)2(ii) and
appearing on page 13 is the responsibility of the Corporation's management and
is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated financial
statements. This schedule has been subjected to the auditing procedures
applied in the audit of the basic consolidated financial statements and, in
our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic consolidated
financial statements taken as a whole.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
March 11, 1997
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<PAGE> 14
<TABLE>
Schedule II
ANGELICA CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED JANUARY 25, 1997
(In Thousands)
-----------------------------------------------
<CAPTION>
Balance at Charged Balance
Beginning to Costs at End of
Description of Period and Expenses Deductions <Fa> Period
- ----------- ---------- ------------ ---------------- ---------
<S> <C> <C> <C> <C>
Reserve for doubtful
accounts - deducted
from receivables in
the balance sheet
YEAR ENDED JANUARY 25, 1997
---------------------------
$ 2,687 $ 1,417 $ 1,459 $ 2,645
======= ======= ======= =======
YEAR ENDED JANUARY 27, 1996
---------------------------
$ 2,699 $ 1,331 $ 1,343 $ 2,687
======= ======= ======= =======
YEAR ENDED JANUARY 28, 1995
---------------------------
$ 2,630 $ 1,622 $ 1,553 $ 2,699
======= ======= ======= =======
<FN>
<Fa> Doubtful accounts written off against reserve provided, net of
recoveries.
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<PAGE> 15
EXHIBIT INDEX
- -------------
</TABLE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
<F*>Asterisk indicates exhibits filed herewith.
<F**>Management contract or compensatory plan incorporated by
reference from the document listed.
3.1 Restated Articles of Incorporation of the Company, as currently in
effect. Said Articles were last filed as and are incorporated herein by
reference to Exhibit 3.1 to the Form 10-K for the fiscal year ended
1/26/91.
3.2 Current By-Laws of the Company, as last amended February 25, 1997.<F*>
4.1 Shareholder Protection Rights Plan. Filed as Registration Statement on
Form 8-A dated August 24, 1988 and incorporated herein by reference.
4.2 10.3% and 9.76% Senior Notes to insurance company due annually to 2004,
together with Note Facility Agreement. Filed as and incorporated herein
by reference to Exhibit 4.2 to the Form 10-K for the fiscal year ended
1/27/90.
4.3 9.15% Senior Notes to insurance companies due December 31, 2001,
together with Note Agreements and First Amendment thereto. Filed as and
incorporated herein by reference to Exhibit 4.3 to the Form 10-K for the
fiscal year ended 2/1/92.
4.4 8.225% Senior Notes to Nationwide Life Insurance Company, American
United Life Insurance Company, Aid Association for Lutherans, and Modern
Woodmen of America due May 1, 2006, together with Note Agreement. Filed
as and incorporated herein by reference to Exhibit 4.4 to the Form 10-Q
for the fiscal quarter ended July 29, 1995.
4.5 Uncommitted Shelf Agreement dated March 1, 1996 for Senior Notes to
insurance company, together with Amendment Agreement No. 1 to Note
Facility Agreement referred to in Exhibit 4.2 above. Filed as and
incorporated herein by reference to Exhibit 4.5 to the Form 10-K for the
fiscal year ended 1/27/96.
4.6 Term Loan Agreement between Angelica Corporation and The First National
Bank of Boston dated as of October 2, 1995. Filed as and incorporated
hereby by reference to
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<PAGE> 16
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
Exhibit 4.6 to the Form 10-K for the fiscal year ended 1/27/96.
Note: No other long-term debt instrument issued by the Registrant
exceeds 10% of the consolidated total assets of the Registrant and its
subsidiaries. In accordance with Item 601(b) (4) (iii) (A) of
Regulation S-K, the Registrant will furnish to the Commission upon
request copies of long-term debt instruments and related agreements.
10.1 Angelica Corporation 1994 Performance Plan (as amended 1/31/95) - Form
10-K for fiscal year ended 1/28/95, Exhibit 10.1.<F**>
10.2 Retirement Benefit Agreement between the Company and Alan D. Wilson
dated August 25, 1987 - Form 10-K for fiscal year ended 1/28/95, Exhibit
10.2.<F**>
10.3 Form of Participation Agreement for the Angelica Corporation Management
Retention and Incentive Plan (filed as Exhibit 10.3 to the Form 10-K for
fiscal year ended 1/30/93 and incorporated herein by reference) with
revised schedule setting out executive officers covered under such
agreements and the "Benefit Multiple" listed for each.<F*>
10.4 Angelica Corporation Stock Option Plan (As amended November 29, 1994) -
Form 10-K for fiscal year ended 1/28/95, Exhibit 10.7.<F**>
10.5 Angelica Corporation Stock Award Plan - Form 10-K for fiscal year ended
2/1/92, Exhibit 10.<F**>
10.6 Angelica Corporation Retirement Savings Plan, as amended and restated -
Form 10-K for fiscal year ended 1/27/90, Exhibit 19.3, incorporating all
amendments thereto through the date of this filing.<F**>
10.7 Supplemental Plan - Form 10-K for fiscal year ended 1/27/90, Exhibit
19.10, incorporating all amendments thereto through the date of this
filing.<F**>
10.8 Incentive Compensation Plan (restated) - Form 10-K for fiscal year ended
1/27/90, Exhibit 19.11.<F**>
10.9 Deferred Compensation Option Plan for Selected Management Employees -
Form 10-K for fiscal year ended
-15-
<PAGE> 17
<CAPTION>
Exhibit
Number Exhibit
- ------ --------
<S> <C>
1/26/91, Exhibit 19.9, incorporating all amendments thereto filed through
the date of this filing.<F**>
10.10 Deferred Compensation Option Plan for Directors - Form 10-K for fiscal
year ended 1/26/91, Exhibit 19.8, incorporating all amendments thereto
filed through the date of this filing.<F**>
10.11 Supplemental and Deferred Compensation Trust - Form 10-K for fiscal year
ended 2/1/92, Exhibit 19.5.<F**>
10.12 Management Retention Trust - Form 10-K for fiscal year ended 2/1/92,
Exhibit 19.4.<F**>
10.13 Performance Shares Plan for Selected Senior Management(restated) - Form
10-K for fiscal year ended 1/26/91, Exhibit 19.3.<F**>
10.14 Management Retention and Incentive Plan (restated) - Form 10-K for
fiscal year ended 1/26/91, Exhibit 19.1.<F**>
10.15 Non-Employee Directors Stock Plan - Form 10-K for fiscal year ended
1/27/90, Exhibit 10.3, incorporating all amendments thereto through the
date of this filing.<F**>
10.16 Restated Deferred Compensation Plan for Non-Employee Directors - Form
10-K for fiscal year ended 1/28/84, Exhibit 10 (v), incorporating all
amendments thereto through the date of this filing. The last amendment
thereto was filed as Exhibit 10.25 to Form 10-K for the fiscal year
ended 1/28/95<F**>
10.17 Restated Angelica Corporation Stock Bonus and Incentive Plan
(Incorporating Amendments Adopted Through October 25, 1994)- Form 10-K
for fiscal year ended 1/28/95, Exhibit 10.20, incorporating all
amendments thereto through the date of this filing. The last amendment
thereto was filed as Exhibit 10.23 to Form 10-K for the fiscal year
ended 1/27/96.<F**>
10.18 Angelica Corporation Pension Plan as Amended and Restated - Form 10-K
for fiscal year ended 1/26/91, Exhibit 19.7, incorporating all
amendments thereto through the date of this filing.<F**>
10.19 Angelica Corporation 1994 Non-Employee Directors Stock Plan,
incorporated by reference to Appendix A of the Company's Proxy
Statement for the Annual Meeting of Shareholders held on May 23,
1995.<F**>
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<PAGE> 18
<CAPTION>
Exhibit
Number Exhibit
- ------ --------
<S> <C>
10.20 Specimen form of Stock Option Agreement under the Angelica Corporation
Stock Option Plan - Form 10-K for fiscal year ended 1/27/96, Exhibit
10.20.<F**>
10.21 Form of Stock Option Agreement under the Angelica Corporation 1994
Performance Plan (filed as Exhibit 10.21 to Form 10-K for fiscal year
ended 1/27/96 and incorporated herein by reference) with four of the
Company's executive officers, together with schedule identifying the
officers and setting forth the material details in which the agreements
differ from the form of agreement that is filed.<F*>
10.22 Form of Indemnification Agreement between the Company and each of its
directors and executive officers, together with a schedule identifying
the directors and executive officers executing such agreements.<F*>
10.23 Employment Agreement between the Company and Lawrence J. Young, dated
November 27, 1996.<F*>
10.24 Employment Agreement between the Company and Theodore M. Armstrong,
dated November 27, 1996.<F*>
10.25 Employment Agreement between the Company and Jill Witter, dated November
27, 1996.<F*>
10.26 Employment Agreement between the Company and L. Linden Mann, dated
November 27, 1996.<F*>
10.27 Employment Agreement between the Company and Alan D. Wilson, dated April
2, 1997.<F*>
10.28 Employment Agreement between the Company and Michael E. Burnham, dated
April 8, 1997.<F*>
10.29 Fourteenth Amendment to Angelica Corporation Retirement Savings Plan as
amended and restated, dated October 29, 1996 - Form 10-Q for fiscal
quarter ended October 26, 1996, Exhibit 10.22, incorporated herein by
reference.<F**>
10.30 Amendment to Angelica Corporation Supplemental Plan, dated July 30, 1996
- Form 10-Q for fiscal quarter ended July 27, 1996, Exhibit 10.22,
incorporated herein by reference.<F**>
-17-
<PAGE> 19
<CAPTION>
Exhibit
Number Exhibit
- ------ --------
<S> <C>
10.31 Amendment to Angelica Corporation Supplemental Plan, dated February 25,
1997.<F*>
10.32 Seventh Amendment to Angelica Corporation Pension Plan as amended and
restated, dated July 30, 1996 - Form 10-Q for fiscal quarter ended July
27, 1996, Exhibit 10.23, incorporated herein by reference.<F**>
10.33 Thirteenth Amendment to Angelica Corporation Retirement Savings Plan as
amended and restated, dated July 30, 1996 - Form 10-Q for fiscal quarter
ended July 27, 1996, Exhibit 10.24, incorporated herein by reference.<F**>
10.34 Amendment to Angelica Corporation Deferred Compensation Option Plan for
Selected Management Employees, dated February 25, 1997.<F*>
13 Certain portions of the Annual Report to Shareholders for the fiscal
year ended January 25, 1997, which have been incorporated by reference.<F*>
21 Subsidiaries<F*>
23 Consent of Independent Public Accountants<F*>
24 Power of Attorney<F*>
27 Financial Data Schedule<F*>
99.1 Annual Report on Form 11-K for the Angelica Corporation Retirement
Savings Plan.<F*>
99.2 Annual Report on Form 11-K for the Angelica Corporation Collinwood
401(k) Plan.<F*>
99.3 Annual Report on Form 11-K for the Angelica Corporation Savannah 401(k)
Plan.<F*>
99.4 Annual Report on Form 11-K for the Angelica Corporation Missouri Plants
401(k) Plan.<F*>
</TABLE>
The Company will furnish to any record or beneficial shareholder requesting a
copy of this Annual Report on Form 10-K a copy of any exhibit indicated in the
above list as filed with this Annual Report on Form 10-K upon payment to it of
its expenses in furnishing such exhibit.
-18-
<PAGE> 1
ANGELICA CORPORATION
INCORPORATED UNDER THE LAWS OF MISSOURI
BY-LAWS
REVISED FEBRUARY 28, 1989
Amended: July 25, 1989
September 26, 1989
August 25, 1992
January 26, 1993
March 30, 1993
September 28, 1993
February 22, 1994
May 24, 1994
November 26, 1996
February 25, 1997
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I: LOCATION AND OFFICES
Section 1:1 Principal Office 1
Section 1:2 Other Offices 1
Section 1:3 Registered Office 1
ARTICLE II: SHAREHOLDERS
Section 2:1 Annual Meeting 1
Section 2:2 Special Meetings 1
Section 2:3 Place of Meetings 2
Section 2:4 Notice of Meetings 2
Section 2:5 Quorum 2
Section 2:6 Organization 3
Section 2:7 Voting 3
Section 2:8 Election of Directors 3
Section 2:9 Persons Who May Vote Certain Shares 4
Section 2:10 List of Shareholders Kept on File
Before Meeting 4
Section 2:11 Proxy 4
Section 2:12 Inspectors of Election 4
Section 2:13 Notice of Shareholder Nominees 5
Section 2:14 Procedures for Submission of Shareholder
Proposals at Annual Meeting 6
Section 2:15 Conduct of Annual Meeting 7
ARTICLE III: DIRECTORS
Section 3:1 General Powers 7
Section 3:2 Number and Qualification 8
Section 3:3 Term of Office 8
Section 3:4 Removal of Directors 8
Section 3:5 Vacancies 9
Section 3:6 Place of Meetings 9
Section 3:7 Organization Meetings 9
Section 3:8 Regular Meetings 9
Section 3:9 Special Meetings 10
Section 3:10 Quorum 10
Section 3:11 Compensation 10
Section 3:12 Actions of Directors in Lieu of Meeting 10
ARTICLE IV: COMMITTEES
Section 4:1 Executive Committee 11
Section 4:2 Meetings of Executive Committee 11
Section 4:3 Emergency Management Committee 12
Section 4:4 Other Committees 12
<PAGE> 3
<CAPTION>
PAGE
----
<S> <C>
ARTICLE V: OFFICERS
Section 5:1 Officers 12
Section 5:2 Elected Officers 13
Section 5:3 Functional Responsibilities 15
Section 5:4 Absence, Disability or Death - Elected
Officers 15
Section 5:5 Term of Office and Compensation 15
Section 5:6 Removal 15
Section 5:7 Vacancies 16
Section 5:8 Bonding 16
Section 5:9 Execution of Instruments 16
ARTICLE VI: CAPITAL STOCK AND DIVIDENDS
Section 6:1 Certificates of Shares 17
Section 6:2 Numbers and Data on Certificates 17
Section 6:3 Cancellation of Certificates 17
Section 6:4 Registration and Change of Registration 17
Section 6:5 Regulations for Transfer 18
Section 6:6 Lost, Stolen, Destroyed or
Mutilated Certificates 18
Section 6:7 Closing of Transfer Books and
Record Dates 19
Section 6:8 Dividends 19
ARTICLE VII: MISCELLANEOUS
Section 7:1 Corporate Seal 19
Section 7:2 Resignations 20
Section 7:3 Waiver 20
Section 7:4 Amendments 20
Section 7:5 Books and Records 20
Section 7:6 Severability 21
ARTICLE VIII: INDEMNIFICATION OF DIRECTORS, OFFICERS
AND OTHERS; INSURANCE
Section 8:1 Liabilities Covered 21
Section 8:2 Procedure for Indemnification 22
Section 8:3 Advance Payment of Expenses 23
Section 8:4 Extent of Rights Hereunder 23
Section 8:5 Purchase of Insurance 23
Section 8:6 Indemnification Agreements 24
</TABLE>
<PAGE> 4
BY-LAWS OF
ANGELICA CORPORATION
--------------------
ARTICLE I: LOCATION AND OFFICES
--------- --------------------
Principal Office.
- ----------------
Section 1:1. The principal office of the Company shall be at such
place as the Board of Directors may from time to time determine, but until a
change is effected such principal office shall be at 424 South Woods Mill
Road, Chesterfield, Missouri 63017-3406.
Other Offices.
- -------------
Section 1:2. The Company may also have other offices, in such places
(within or without the State of Missouri) as the Board of Directors may from
time to time determine.
Registered Office.
- -----------------
Section 1:3. The registered office of the Company shall be maintained
in the State of Missouri, and may be, but need not be, identical with the
principal office. The registered office may be changed from time to time by
action of the Board of Directors and upon appropriate notice to the Secretary
of State.
ARTICLE II: SHAREHOLDERS
---------- ------------
Annual Meeting.
- --------------
Section 2:1. The annual meeting of the shareholders of the Company,
for the purpose of electing Directors and for the transaction of such other
business as properly may be brought before the meeting shall be held at such
date and time as shall be set by the Board of Directors annually at the
Organizational Meeting of the Board of Directors.
Special Meetings.
- ----------------
Section 2:2. Special meetings of the shareholders may be called by the
Chief Executive Officer, by the Board of Directors, or by, the holders of not
less than 50% of all of the outstanding shares entitled to vote at such
meeting. At the written request of a majority of the members of the Board of
Directors or of the holders of not less than 50% of all of the outstanding
shares
1
<PAGE> 5
entitled to vote at such meeting, the Chairman of the Board, the President,
or the Secretary shall issue a call for a special meeting of the shareholders.
Place of Meetings.
- -----------------
Section 2:3. All meetings of the shareholders shall be held at the
principal office of the Company, or at such other place, within or without
the State of Missouri, as stated in the notice of the meeting.
Notice of Meetings.
- ------------------
Section 2:4. Unless waived, as provided in Section 7:3 of these
By-Laws, written or printed notice of each meeting of the shareholders
stating the place, day and hour of the meeting, and, in the case of a special
meeting or where otherwise required by law, the purpose or purposes for which
the meeting is called, shall, by or at the direction of the officer or other
person calling the meeting, be delivered or given to each shareholder of
record entitled to vote at such meeting, not less than ten (10) nor more than
fifty (50) days (or such greater period as then provided by law) before the
date of the meeting, either personally or by mail. Any notice of a
shareholders' meeting sent by mail shall be deemed to be delivered when
deposited in the United States mail, with postage thereon prepaid, addressed
to the shareholder at his address as it appears on the records of the
Company.
Quorum.
- ------
Section 2:5. A majority of the outstanding shares entitled at the time
to vote thereat, when represented either in person or by proxy at any meeting
of the shareholders, shall constitute a quorum for the transaction of
business, except as otherwise provided by law or the Articles of
Incorporation; but in the absence of such a quorum, a majority of the shares
represented at the meeting shall have the right successively to adjourn the
meeting to a specified date not longer than ninety days after such
adjournment, by action by a majority of the shares represented at such
meeting and without the need to give notice to shareholders not present at
the meeting. At such adjourned meeting, at which a quorum shall attend, all
business may be transacted which might have been transacted at the original
meeting; provided, that at such adjourned meeting no person who would not
have been entitled to vote at the original meeting shall be permitted to
vote. Every decision by a majority of such quorum shall be valid as an act
of the Company unless a larger vote is required by law or by the Articles of
Incorporation.
2
<PAGE> 6
Organization.
- ------------
Section 2:6. The Chairman of the Board or in his absence, the
Vice-Chairman of the Board, if any, or in his absence, the President, or in
his absence, a Vice-President (in the order of priority as may be prescribed
by Resolution of the Board of Directors), or in the absence of any
Vice-President, the Secretary, or in their absence any other officer (in the
order of seniority of age) shall call meetings of shareholders to order and
act as chairman thereof. In case none of the officers is present, the
shareholders present may elect a chairman of such meeting from among their
members. The Secretary of the Company shall act as secretary of all meetings
of the shareholders. In his absence, or in the event he shall be acting as
chairman, the chairman may appoint any person to act as secretary.
Voting.
- ------
Section 2:7.1. Every shareholder entitled to vote at a meeting of
shareholders upon a particular question, pursuant to law or the Articles of
Incorporation, shall have one vote for each share of stock so entitled to
vote standing in his name on the books of the Company at the time fixed by
law or pursuant to these By-Laws for the determination of the right to vote
thereat.
Section 2:7.2. The date for determining the shareholders entitled to
vote at a meeting of shareholders shall be determined pursuant to Section 6:7
if action thereunder shall have been taken to establish the controlling date;
otherwise, only the shareholders who are shareholders of record at the close
of business on the twentieth day preceding the date of the meeting shall be
entitled to notice of and vote at the meeting and any adjournment thereof,
with the exception that if prior to the meeting, written waivers of notice of
the meeting are signed and delivered to the Company by all shareholders of
record at the time the meeting is convened, only the shareholders who are
shareholders of record at the time the meeting is convened shall be entitled
to vote at the meeting and any adjournment thereof.
Election of Directors.
- ---------------------
Section 2:8. In all elections for Directors of the Company, each
shareholder entitled to vote for the election of Directors shall be entitled
to one vote in person or by proxy for each share having voting power. In
each election for Directors, no shareholder shall be entitled to vote
cumulatively or to cumulate his votes.
3
<PAGE> 7
Persons Who May Vote Certain Shares.
- -----------------------------------
Section 2:9. Shares standing in the name of another corporation,
domestic or foreign, may be voted by such officer, agent or proxy as the
By-Laws of such corporation may prescribe or, in the absence of such
provision, as the Board of Directors of such corporation may determine.
Shares standing in the name of a deceased person may be voted by his
administrator or executor, either in person or by proxy, and shares standing
in the name of a guardian, custodian, curator, or trustee, in whose name such
shares are registered, may be voted by such fiduciary, either in person or by
proxy. A shareholder whose shares are pledged shall be entitled to vote such
shares until such shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so
transferred.
List of Shareholders Kept on File Before Meeting.
- ------------------------------------------------
Section 2:10. At least ten days before each meeting of the
shareholders, the Secretary, or in the event of his absence or disability, an
Assistant Secretary, shall prepare a complete list of shareholders entitled
to vote at such meeting, arranged in alphabetical order with the address of
and the number of shares held by each, which list, for a period of ten days
prior to such meeting, shall be kept on file at the registered office of the
Company and shall be subject to inspection by any shareholder at any time
during usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection
of any shareholder during the whole time of the meeting. The original share
ledger or transfer book or a duplicate thereof kept in Missouri, shall be
prima facie evidence as to who are the shareholders entitled to examine such
list or share ledger or transfer book or to vote at any meeting of the
shareholders. Failure to comply with the requirements of this section shall
not affect the validity of any action taken at such meeting.
Proxy.
- -----
Section 2:11. A shareholder may vote either in person or by proxy
executed in writing by the shareholder or his duly authorized
attorney-in-fact. No proxy shall be valid after eleven months from the date
of its execution, unless otherwise provided in the proxy.
Inspectors of Election.
- ----------------------
Section 2:12. At each meeting of the shareholders the polls shall be
opened and closed, the proxies and ballots shall be received and be taken in
charge, and all questions touching the
4
<PAGE> 8
qualification of voters and validity of proxies and the acceptance or
rejection of votes shall be decided by the chairman and secretary of the
meeting as judges of election; provided, however, that upon request of any
shareholder, but not otherwise, the chairman of the meeting shall appoint not
less than two persons who are not Directors as inspectors to receive and
canvass the votes given at such meeting and certify the result to him. Any
inspector, before he enters on the duties of his office, shall take and
subscribe the following oath, or any other oath as may be prescribed by law
for such purpose, before any officer authorized by law to administer oaths:
"I do solemnly swear that I will execute the duties of an inspector of the
election now being held with strict impartiality, and according to the best of
my ability." In all cases where the right to vote upon any share or shares
shall be questioned, it shall be the duty of the inspectors, if any, or the
persons conducting the vote, to examine the transfer books of the Company as
evidence of shares held, and all shares entitled to vote that may appear
standing thereon in the name of any person or persons shall be voted upon by
such person or persons, either in person or by proxy.
Notice of Shareholder Nominees.
- ------------------------------
Section 2:13. Only persons who are nominated in accordance with the
procedures set forth in this Section 2:13 shall be eligible for election as
Directors of the Company. Nominations of persons for election to the Board
of Directors of the Company may be made at a meeting of shareholders (a) by
or at the direction of the Board of Directors or (b) by any shareholder of
the Company entitled to vote for the election of Directors at such meeting
who complies with the procedures set forth in this Section 2:13. All
nominations by shareholders shall be made pursuant to timely notice in proper
written form to the Secretary of the Company. To be timely, a shareholder's
notice shall be delivered to or mailed and received at the principal
executive offices of the Company not less than 30 days nor more than 60 days
prior to the meeting; provided, however, that in the event that less than 40
days' notice or prior public disclosure of the date of the meeting is given
or made to shareholders, notice by the shareholder to be timely must be so
received not later than the close of business on the 10th day following the
day on which such notice of the date of the meeting was mailed or such public
disclosure was made. To be in proper written form, such shareholder's notice
shall set forth in writing (a) as to each person whom the shareholder
proposes to nominate for election or re-election as a Director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of Directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended, including, without limitation, such
5
<PAGE> 9
person's written consent to being named in the proxy statement as a nominee
and to serving as a Director if elected; and (b) as to the shareholder giving
the notice (i) the name and address, as they appear on the Company's books, of
such shareholder and (ii) the class and number of shares of the Company which
are beneficially owned by such shareholder. At the request of the Board of
Directors, any person nominated by the Board of Directors for election as
Director shall furnish to the Secretary of the Company that information
required to be set forth in a shareholder's notice of nomination which
pertains to the nominee. In the event that a shareholder seeks to nominate
one or more Directors, the Secretary shall appoint two inspectors, who shall
not be affiliated with the Company, to determine whether a shareholder has
complied with this Section 2:13. If the inspectors shall determine that a
shareholder has not complied with this Section 2:13, the inspectors shall
direct the chairman of the meeting to declare to the meeting that the
nomination was not made in accordance with the procedures prescribed by the
By-Laws of the Company, and the chairman shall so declare to the meeting and
the defective nomination shall be disregarded.
Procedures for Submission of Shareholder Proposals at Annual Meeting.
- --------------------------------------------------------------------
Section 2:14. At any annual meeting of the shareholders of the
Company, only such business shall be conducted as shall have been brought
before the meeting (i) by or at the direction of the Board of Directors or
(ii) by any shareholder of the Company who complies with the procedures set
forth in this Section 2:14. For business properly to be brought before an
annual meeting by a shareholder, the shareholder must have given timely
notice thereof in proper written form to the Secretary of the Company. To be
timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Company not less than 30 days nor more
than 60 days prior to the meeting; provided, however, that in the event that
less than 40 days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder to be
timely must be received not later than the close of business on the 10th day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. To be in proper written form, a
shareholder's notice to the Secretary shall set forth in writing as to each
matter the shareholder proposes to bring before the annual meeting (i) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting,
(ii) the name and address, as they appear on the Company's books, of the
shareholder proposing such business, (iii) the class and number of shares of
the Company which are beneficially owned by the
6
<PAGE> 10
shareholder and (iv) any material interest of the shareholder in such
business. Notwithstanding anything in the By-Laws to the contrary, no
business shall be conducted at an annual meeting except in accordance with the
procedures set forth in this Section 2:14. The chairman of an annual meeting
shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in accordance with the
provisions of this Section 2:14, and, if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted.
Conduct of Annual Meeting.
- -------------------------
Section 2:15. The date and time of the opening and the closing of the
polls for each matter upon which the shareholders will vote at a meeting
shall be announced at the meeting by the person presiding over the meeting.
The Board of Directors of the Company may to the extent not prohibited by law
adopt by resolution such rules and regulations for the conduct of the meeting
of shareholders as it shall deem appropriate. Except to the extent
inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of stockholders shall have the right
and authority to prescribe such rules, regulations and procedures and to do
all such acts as, in the judgment of such chairman, are appropriate for the
proper conduct of the meeting. Such rules, regulations or procedures,
whether adopted by the Board of Directors or prescribed by the chairman of
the meeting, may to the extent not prohibited by law include, without
limitation, the following: (i) the establishment of an agenda or order of
business for the meeting; (ii) rules and procedures for maintaining order at
the meeting and the safety of those present; (iii) limitations on attendance
at or participation in the meeting to shareholders of record of the Company,
their duly authorized and constituted proxies or such other persons as the
chairman of the meeting shall determine; (iv) restrictions on entry to the
meeting after the time fixed for the commencement thereof; and (v)
limitations on the time allotted to questions or comments by participants.
Unless, and to the extent, determined by the Board of Directors or the
chairman of the meeting, meetings of shareholders shall not be required to be
held in accordance with the rules of parliamentary procedure.
ARTICLE III: DIRECTORS
----------- ---------
General Powers.
- --------------
Section 3:1. The Board of Directors shall control and manage the
business and property of the Company. The Board may exercise
7
<PAGE> 11
all such powers of the Company and do all lawful acts and things as are not by
law, the Articles of Incorporation, or elsewhere in these By-Laws, directed or
required to be exercised or done by the shareholders or some particular
officer of the Company.
Number and Qualification.
- ------------------------
Section 3:2. The number of Directors to constitute the Board of
Directors shall be 7, effective May 28, 1997. Each change in the number of
Directors (made by amendment to this By-Law) shall be reported to the
Secretary of State of Missouri within thirty calendar days of such change.
Directors need not be shareholders unless the Articles of Incorporation, as
amended, shall require that Directors be shareholders, in which case any
Director who shall cease to be a shareholder of record shall thereby be
disqualified and his office as Director shall thereupon automatically become
vacant.
Each Director shall be under the age of 72 years at the time of his
election to the Board. If a Director attains his 72nd birthday prior to the
expiration of his term, he shall serve until the next annual meeting at which
time his office as Director shall thereupon automatically become vacant.
Notwithstanding the above, a majority of the Board of Directors may elect to
waive the age requirement for a Director/Nominee.
Term of Office.
- --------------
Section 3:3. The Board of Directors shall be elected by the
shareholders entitled by law or the Articles of Incorporation to vote for the
election of Directors. The Board of Directors shall be divided into three
Groups, with the terms of office of each Group ending in successive years.
Upon expiration of a Group's initial term, all succeeding terms shall be for
a period of three (3) years, until the next applicable Annual Shareholders
Meeting. Each Director, unless removed, resigned, disqualified, or otherwise
separated from office, shall hold office for the term for which he is elected
or until his successor shall have been elected and qualified.
Removal of Directors.
- --------------------
Section 3:4. Directors may be removed at a meeting of shareholders
called expressly for such purpose in the manner provided herein and subject
to the limitations provided by law. The entire Board of Directors may be
removed, with or without cause, by a vote of not less than 75% of all the
outstanding shares entitled to vote at such meeting. Less than the entire
Board of Directors may be removed, with or without cause, by a vote of not less
than 75% of all the outstanding shares entitled to vote at
8
<PAGE> 12
such meeting, except in such case no Director may be removed if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the class of Directors of which he is a part. Such
shareholders meeting shall be held at the registered office or principal office
of the Company in Missouri or in the city or county in Missouri in which the
principal business office of the Company is located.
Vacancies.
- ---------
Section 3:5. In case of any vacancy in the Board of Directors through
death, resignation, or removal pursuant to the By-Laws or as provided by law,
of one or more of the Directors, a majority of the surviving or remaining
Directors may fill such vacancy or vacancies until the successor or
successors are elected at the next shareholders meeting for the purpose of
serving the remainder of the unexpired term. Unless otherwise provided in
the Articles of Incorporation, vacancies on the Board of Directors resulting
from any increase in the number of Directors to constitute the Board of
Directors may be filled by a majority of Directors then in office, although
less than a quorum, or by a sole remaining Director, until the next election
of Directors by the shareholders of the Company.
Place of Meeting.
- ----------------
Section 3:6. The Board of Directors may hold its meetings at the
principal office of the Company or at such other place or places within or
without the State of Missouri as it may from time to time determine. Members
of the Board of Directors may participate in a meeting of a Board by means of
conference telephone or similar communications equipment whereby all persons
participating in the meeting can hear each other, and participation in a
meeting in this manner shall constitute presence in person at the meeting.
Organization Meetings.
- ---------------------
Section 3:7. Organization meetings shall be held on a date set by the
Board of Directors, provided that such date shall be either on the same day
or a date subsequent to the Annual Meeting of Shareholders, and shall be held
at the principal office of the Corporation or at such other place within or
without the State of Missouri, as the Board may deem acceptable. No notice
shall be required for any organization meeting.
Regular Meetings.
- ----------------
Section 3:8. The Board of Directors from time to time, by resolution,
may provide for regular meetings, which may thereafter
9
<PAGE> 13
be held at the time and place designated, without notice thereof to the
Directors; provided, however, that any Director absent from the meeting at
which such resolution was adopted shall be notified of the adoption thereof
not less than 3 days prior to the first regular meeting to be held pursuant
thereto.
Special Meetings.
- ----------------
Section 3:9. Special meetings of the Board of Directors may be called
by the Chairman of the Board, the Vice-Chairman of the Board, if any, the
President, or any two Directors, and shall be held at the time and place
(within or without the State of Missouri) specified in the call. Unless
waived as hereinafter provided, notice of the time, place and purpose of each
special meeting shall be delivered to each Director, either in person or by
mail, postage prepaid and addressed to such Director, either at the most
recent address which he has furnished the Secretary of the Company or at his
last known resident address at least two days before such meeting. If given
by mail, such notice shall be deemed delivered upon deposit in the United
States mail, postage prepaid, and addressed in either manner aforesaid.
Quorum.
- ------
Section 3:10. Except as otherwise provided by law, by the Articles of
Incorporation, or elsewhere in these By-Laws, a majority of the full Board of
Directors shall constitute a quorum for the transaction of business, and the
act of a majority of the Directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. In the absence of a
quorum, a majority of the Directors present at a meeting, or the Director if
there be only one present, or the Secretary if there be no Director present,
may adjourn the meeting from time to time, not to exceed thirty days until a
quorum be had. No notice other than announcement at the meeting need be
given of such adjournment.
Compensation.
- ------------
Section 3:11. A Director may be entitled to receive (a) such
transportation and other expenses incident to his attendance at any meeting
of the Board of Directors or of any committee thereof of which he may be a
member as the Board of Directors from time to time may determine, and (b)
such compensation as the Board of Directors from time to time may determine.
Actions of Directors in Lieu of Meeting.
- ---------------------------------------
Section 3:12. Any action which is required to be or may be taken at a
meeting of the directors may be taken without a meeting
10
<PAGE> 14
if consents in writing, setting forth the action so taken, are signed by all
of the Directors. The consents shall have the same force and effect as a
unanimous vote of the Directors at a meeting duly held and may be stated as
such in any certificate or document filed pursuant to the provisions of
Missouri law. The Secretary shall file the consents with the minutes of the
meetings of the Board of Directors.
ARTICLE IV: COMMITTEES
---------- ----------
Executive Committee.
- -------------------
Section 4:1. The Board of Directors may, at its discretion and by
resolution adopted by a majority of all the members of the Board of
Directors, designate an Executive Committee to consist of two or more
Directors, one of whom shall be designated by the Board as Chairman of the
Executive Committee. The Board of Directors may delegate to the Executive
Committee any and all authority in the management of the Company otherwise
vested in the Board of Directors. The Board of Directors shall have the
power at any time to expand or limit the authority of, to fill vacancies in,
to change the membership of, or to dissolve the Executive Committee. A
majority of the members of the Executive Committee shall be sufficient to
determine its action unless the Board of Directors shall otherwise provide
for a greater percentage.
Meetings of Executive Committee.
- -------------------------------
Section 4:2. Regular meetings of the Executive Committee may be held
without call or notice at such times and places as the Executive Committee
from time to time may fix. Other meetings of the Executive Committee may be
called by any member thereof either by oral, telegraphic or written notice
not later than the day prior to the date set for such meeting. Such notice
shall state the time and place of the meeting and, if by telegraph or in
writing, shall be addressed to each member at his address as shown by the
records of the Secretary of the Company. Any member may, or upon request by
any member, the Secretary shall, give the required notice calling the
meeting. The Executive Committee shall keep a record of its proceedings, and
shall regularly present such records to the Board of Directors. Members of
the Executive Committee or any other Committee designated by the Board of
Directors may participate in a meeting of the Committee by means of
conference telephone or similar communications equipment whereby all persons
participating in the meeting in this manner shall constitute presence in
person at the meeting.
11
<PAGE> 15
Emergency Management Committee.
- ------------------------------
Section 4:3. The Board of Directors, by resolution of a majority of
the whole Board, may appoint three or more persons to constitute an Emergency
Management Committee or otherwise designate the manner in which the
membership of such Committee shall be determined. To the extent provided in
said resolution, and subject to the provisions of the Articles of
Incorporation and these By-Laws, such Committee shall have and may exercise
all the powers of the board of Directors in the management of the business
and affairs of the Company but only during any period when the Board of
Directors shall be unable to function by reason of vacancies therein caused
by death, resignation or otherwise, and there shall be no Director remaining
and able to fill such vacancies pursuant to Section 3:5 of Article III and
until a Board of Directors shall have been duly constituted. Such Committee
shall, during the time it is authorized to function as provided herein, have
power to call special meetings of stockholders, to elect or appoint officers
to fill vacancies as circumstances may require and to authorize the seal of
the Company to be affixed to all papers which may require it. Such Committee
shall make its own rules of procedure. A majority of the Committee shall
constitute a quorum. Any vacancy in the Committee caused by death,
incapacity, resignation or otherwise may be filled by the remaining members
though less than a quorum and any member so chosen shall serve until a Board
of Directors has been duly constituted.
Other Committees.
- ----------------
Section 4:4. Other Committees may be established from time to time by
the Board of Directors. Such other Committees shall have such purpose(s) and
such power(s), as the Board of Directors by resolution may confer. The Board
of Directors or such officer or Committee as the Board of Directors may
designate, shall have the power to appoint members of such other Committee,
to remove any member thereof and to fill any vacancy therein, and to
designate the Chairman of such other Committee. Unless otherwise provided by
the Board of Directors, a majority of the members of such other Committee
shall constitute a quorum, and the acts of a majority of the members present
at a meeting at which a quorum is present shall be the act of such other
Committee.
ARTICLE V. OFFICERS
--------- --------
Section 5:1. The Principal Officers of the Company shall be a Chairman
of the Board, a Vice-Chairman of the Board (if the Board shall choose to
elect one), a Chief Executive Officer, a President, one or more Executive
Vice-Presidents, one or more Vice-Presidents
12
<PAGE> 16
and/or Vice-Presidents of such designation as the Board shall deem
appropriate, a Secretary, a Treasurer, one or more Controller(s) and such
other officer or assistant officers as may be deemed necessary and elected by
the Board of Directors. Each elected officer shall have all powers and duties
usually incident to such elected office except as modified pursuant to the
provisions of Sections 5:2 and 5:3. Any two or more offices may be held by the
same person except that the offices of Chairman of the Board or of President
and the office of the Secretary may not be held by the same person. Any
officer elected by the Board may be specially designated by the Board with one
or more functional titles.
Elected Officer.
- ---------------
Section 5:2. The general duties of the elected officers shall be as
set forth below:
(a) Chairman of the Board. The Board of Directors shall elect
---------------------
one of its number Chairman of the Board who shall preside at all meetings of
the shareholders and of the Board of Directors at which he may be present.
The Chairman of the Board shall have such other powers and duties as, from
time to time, shall reside in or be assigned said office pursuant to the
provisions of subsection (h) of this Section 5:2 and of Section 5:3.
(b) Vice-Chairman of the Board. The Board of Directors may, in
--------------------------
its discretion, elect one of its number Vice-Chairman of the Board who, in
the absence of the Chairman of the Board, shall preside at all meetings of
the shareholders and of the Board of Directors at which he may be present.
The Vice-Chairman of the Board shall have such other powers and duties as,
from time to time, shall reside in or be assigned said office pursuant to the
provisions of subsection (h) of this Section 5:2 and Section 5:3.
(c) President. When the Chairman of the Board, and the
---------
Vice-Chairman of the Board, if any, are absent the President shall preside at
all meetings of the Board of Directors and shall have such other powers and
duties as, from time to time shall reside in or be assigned to said office
pursuant to the provisions of subsection (h) of this Section 5:2 and of
Section 5:3.
(d) Executive Vice-President and Vice President. Each Executive
-------------------------------------------
Vice-President and each Vice President, of such designation as the Board has
deemed appropriate, shall have such powers and duties as, from time to time,
shall reside in or be assigned to said office pursuant to the provisions of
subsection (h) of this Section 5:2 and of Section 5:3.
13
<PAGE> 17
(e) Treasurer. Subject to the authority of the Chief Financial
---------
Officer of the Company, if there be one, the Treasurer shall have custody of,
and be responsible for, all the funds and securities of the Company, and
shall deposit and withdraw such funds and securities in and from such banks,
trust companies, or other depositories as shall be selected by and in
accordance with the resolutions adopted from time to time by the Board of
Directors. He shall also have such other powers and duties as, from time to
time shall reside in or be as assigned to said office pursuant to the
provisions of subsection (h) of this Section 5:2 and of Section 5:3.
(f) Secretary. The Secretary shall keep the minutes of the
---------
meetings of the shareholders, the Board of Directors (unless otherwise
delegated by the Board to one of its members), and the Executive Committee,
if any, shall see that all notices are duly given in accordance with the
provisions of these By-Laws or as required by law, be custodian of the
Company's records and seal, keep a register of the post office address of all
shareholders, have general charge of the books and records of the Company,
and sign such instruments with the President or other officers as may be
required. The Secretary shall have such other powers and duties as, from
time to time, shall reside in or be as assigned to said office pursuant to
the provisions of subsection (h) of this Section 5:2 and of Section 5:3.
(g) Controller. Subject to the authority of the Chief Financial
----------
Officer of the Company, if there be one, the Controller shall have custody of
and be responsible for the maintenance of the books of account of the
Company. He shall also have such other powers and duties as, from time to
time shall reside in or be as assigned to said office pursuant to the
provisions of subsection (h) of this Section 5:2 and of Section 5:3.
(h) Other Duties and Responsibilities. Subject to the ultimate
---------------------------------
authority of the Board of Directors and its Executive Committee, if there be
one, each of the officers elected or appointed by the Board of Directors,
shall have such other duties and responsibilities as may be provided by law,
and to the extent not in conflict with law, and as shall from time to time be
assigned, modified or terminated by the Chief Executive Officer or his
designee (which may be the person who is such officer's immediate superior as
shown on any Company organization chart or similar document outlining job
duties, responsibilities or accountabilities of the Company's officers as
may be in effect from time to time).
14
<PAGE> 18
Functional Responsibilities.
- ---------------------------
Section 5:3. Chief Executive Officer. The Chief Executive Officer
-----------------------
shall have active executive management of and ultimate responsibility for the
conduct of the business operations of the Company. Such executive management
shall include the assignment of responsibilities of other elected or
appointed officers, provided however, that he may, in his sole discretion,
delegate his authority to assign the responsibilities of the other elected
officers to an officer designated by him for that purpose. Unless such power
is otherwise delegated to some other officer, agent or proxy, the Chief
Executive Officer shall have full power and authority in behalf of the
Company: (i) to act and to vote, as fully as the Company might do if present
at any meeting, or any adjournment thereof, of the shareholders of a
corporation in which the Company may hold stock; (ii) to waive notice of and
consent to the holding of any such meeting or adjournment; and (iii) to sign
a consent to action in lieu of any such meeting or adjournment.
Absence, Disability or Death - Elected Officers.
- -----------------------------------------------
Section 5:4. In the absence, disability or death of any elected
Officer of the Company the duties and powers of such officer shall be
performed first by the superior of such officer, or by such superior's
designee, or second by the person who is the officer's subordinate as shown
in any Company organization chart or similar document outlining job duties,
responsibilities or accountabilities of such officer in effect from time to
time.
Term of Office and Compensation.
- -------------------------------
Section 5:5. The compensation of the elected or appointed officers of
the Company shall be fixed by the Board of Directors; provided, however, that
the Board of Directors may delegate to any committee or officer, other than
the holder of the office involved, the power to fix the compensation of
officers. All officers of the Company shall hold office only at the pleasure
of the Board of Directors.
Removal.
- -------
Section 5:6. Any officer elected by the Board of Directors may be
removed by the Board of Directors with or without a hearing and with or
without cause whenever in its judgement the best interests of the Company
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
15
<PAGE> 19
Vacancies.
- ---------
Section 5:7. Any vacancy in any office because of death, resignation,
removal, or any other cause shall be filled in the manner prescribed in these
By-Laws for the election to such office.
Bonding.
- -------
Section 5:8. If so required by the Board of Directors, or applicable
Company policy an officer shall give bond for the faithful discharge of his
duties in such form and amount and with such sureties as the Board of
Directors may provide, but the premiums for any such bond shall be borne by
the Company.
Execution of Instruments.
- ------------------------
Section 5:9. All bills of exchange, promissory notes, and checks
issued, drawn, or made by the Company shall be signed by such officer or
officers, or such individual or individuals, as the Board of Directors may
from time to time designate therefor; provided, however, that in the absence
of any such designation, they may be signed on behalf of the Company by any
two of the following officers: The Chairman of the Board, the Vice-Chairman
of the Board, if any, the President, any Executive Vice President, any
Vice-President, and the Treasurer. Any other contract or obligation of the
Company shall be executed by such officer or officers, or such other
individual or individuals, as the Board of Directors may direct, or, in the
absence of such direction, by the Chairman of the Board, the Vice-Chairman of
the Board, if any, the President, any Executive Vice-President, any Vice
President (of whatever designation he/she may have), the Secretary, the
Treasurer, or an Assistant Secretary, provided, however, that any person
designated as an authorized signer, whether by law, by action of the Board of
Directors, by these By-Laws, or otherwise, shall, without exception, obtain
the prior approvals, or the review of action, required by any resolution
adopted by the Board of Directors expressing a policy governing the execution
of documents intended to bind this Company. The seal of the Company may be
affixed to instruments executed on its behalf by its proper officers and
shall be affixed to such instruments as required by law and as the Board of
Directors may direct. When affixed, the seal may be attested by the
Secretary, an Assistant Secretary or by such other officer as the Board of
Directors may direct.
16
<PAGE> 20
ARTICLE VI: CAPITAL STOCK AND DIVIDENDS
---------- ---------------------------
Certificates of Shares.
- ----------------------
Section 6:1. Certificates for shares of the capital stock of the
Company shall be in such form, not inconsistent with applicable law or the
Articles of Incorporation, as shall be approved by the Board of Directors,
and shall be signed by the Chairman of the Board or by the President or an
Executive Vice-President or a Vice President and by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer, provided that
the signatures of any such officers thereon may be facsimiles, engraved or
printed, if such certificates are signed by a transfer agent other than the
Company or its employee or by a registrar other than the Company or its
employee. The seal of the Company shall be impressed, by original or by
facsimile, printed or engraved, on all such certificates. In case any such
officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon any such certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued,
such certificate may nevertheless be issued by the Company with same effect
as if such officer, transfer agent or registrar had not ceased to be such
officer, transfer agent or registrar at the date of its issue.
Numbers and Data on Certificate.
- -------------------------------
Section 6:2. All Certificates shall be numbered as may be required by
resolution of the Board of Directors, and each shall show thereon the name of
the person owning the shares represented thereby, the number of such shares,
and the date of issue, which information shall be entered on the Company's
books.
Cancellation of Certificates.
- ----------------------------
Section 6:3. Every certificate surrendered to the Company for transfer
or otherwise in exchange for a new certificate shall be marked "canceled"
with the date of cancellation, and no new certificate(s) in lieu thereof
shall be issued until the former certificate(s) for an equivalent number of
shares shall have been surrendered and cancelled, except as otherwise
provided in Section 6:6 of these By-Laws.
Registration and Change of Registration.
- ---------------------------------------
Section 6:4. The names and addresses of the persons owning
certificates representing shares of stock in the Company together with the
number of shares of stock owned by them respectively shall be registered on
the books of the Company. The Company shall
17
<PAGE> 21
register transfers of such certificates together with the date of such
transfers if the certificates are (1) delivered and endorsed either in blank
or to a specified person by the person appearing by the certificate to be the
owner of the shares represented thereby, or (2) delivered together with a
separate document containing a written assignment of the certificate or a
power of attorney to sell, assign, or transfer the same or the share
represented thereby, signed by the person appearing by the certificate to be
the owner of the shares represented thereby (said assignment or power of
attorney to be either in blank or to a specified person), or (3) delivered
together with an assignment endorsed thereon or in a separate instrument
signed by the trustee in bankruptcy, receiver, guardian, executor,
administrator, custodian, or other person duly authorized by law to transfer
the certificate on behalf of the person appearing by the certificate to be the
owner of the shares represented thereby. Notwithstanding the above provisions
on transfers of shares, the person in whose name shares stand on the books of
the Company at the date of the closing of the transfer books or at the record
date fixed by law or pursuant to Section 6:7 of these By-Laws shall be deemed
the owner thereof insofar as rights to receive dividends, to vote, and to have
any other rights or privileges as a shareholder.
Regulations for Transfer.
- ------------------------
Section 6:5. The Board of Directors shall have power and authority to
make such rules and regulations as it deems expedient concerning the issue,
transfer, and registration of certificates for shares of the capital stock of
the Company, and may appoint one or more transfer agents or transfer clerks
as registrars of transfer, and may require all certificates to bear the
signature of a transfer agent or transfer clerk or registrar of transfer.
Lost, Stolen, Destroyed or Mutilated Certificates.
- -------------------------------------------------
Section 6:6. Upon proof satisfactory to the Chairman of the Board, or,
in his absence the President and the Secretary that any certificate for
shares of the capital stock of the Company issued and outstanding has been
lost, stolen, destroyed or mutilated, and upon due application in writing by
the person in whose name the same may stand of record on the books of the
Company, or by his legal representative, and the surrender thereof in the
case of a mutilated certificate, or, in the case of a certificate having been
lost, stolen, or destroyed, the giving of an indemnifying bond in such form
and amount and with such sureties as the Board of Directors may require, the
proper officers of the Company are authorized and empowered to issue a new
certificate or certificates to the owner thereof in lieu of the certificate
that has been lost, stolen, destroyed, or mutilated. The Board of Directors
may
18
<PAGE> 22
delegate to any transfer agent of the Corporation the authorization of
the issue of such new certificate or certificates and the approval of the
form and amount of such indemnity bond or bonds and the surety or sureties
thereon.
Closing of Transfer Books and Record Dates.
- ------------------------------------------
Section 6:7. The Board of Directors shall have power to close the
transfer books of the Company for a period not exceeding fifty days (or such
greater period as then provided by law) preceding the date of any meeting of
shareholders or the date for payment of any dividend or the date for the
allotment of rights or the date when any change or conversion or exchange of
shares shall go into effect, or in lieu thereof may fix in advance a date not
exceeding fifty days (or such greater period as then provided by law)
preceding the date of any meeting of shareholders or the date for payment of
any dividend or the date of the allotment of rights or the date when any
change or conversion or exchange of shares shall go into effect, as a record
date for the determination of the shareholders entitled to notice of and to
vote at any such meeting and any adjournment thereof or entitled to receive
payment of any such dividend, or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange of
shares, and in such case only shareholders of record on the date of closing
the transfer books or on the record date so fixed shall be entitled to such
notice of and to vote at such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or
to exercise such rights, as the case may be, notwithstanding any transfer of
any shares on the books of the Company after such date of closing of the
transfer books or such record date fixed as aforesaid.
Dividends.
- ---------
Section 6:8. Subject to any and all limitations upon the payment of
dividends imposed by law or by the Articles of Incorporation, the Board of
Directors, in its discretion, may from time to time declare and cause to be
paid dividends upon the outstanding shares of the capital stock of the
Company in cash, property, shares of the capital stock of the Company, or any
combination thereof.
ARTICLE VII: MISCELLANEOUS
----------- -------------
Corporate Seal.
- --------------
Section 7:1. The Board of Directors shall provide a suitable seal,
containing the name of the Company, which seal shall be in
19
<PAGE> 23
the custody of the Secretary, and may provide for one or more duplicates
thereof to be kept in the custody of the Treasurer and Assistant Treasurer
and/or Assistant Secretary.
Resignations.
- ------------
Section 7:2. Any Director or Officer of the Company may resign such
office at any time by giving written notice to the Chairman of the Board of
Directors, the President, or the Secretary. Such resignation shall take
effect at the date of the receipt of such notice, or at any later time
specified therein, and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Waiver.
- ------
Section 7:3. Whenever any notice is required to be given by law, the
Articles of Incorporation, or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to such notice, or a duly authorized
representative of such person, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Presence
at a meeting of shareholders or of Directors shall constitute a waiver of
notice except where the shareholder or Director states that he is present
solely for the purpose of objecting to the transaction of business because
the meeting was not lawfully called or convened.
Amendments.
- ----------
Section 7:4. The Board of Directors, provided the power conferred
hereby shall not be inconsistent with the Articles of Incorporation or
applicable law, shall have power to make, amend and repeal the By-Laws of the
Company by a vote of a majority of all of the members of the Board of
Directors at any organization, regular or special meeting of the Board,
provided that notice of intention to make, amend or repeal the By-Laws, in
whole or in part shall have been given at the next preceding meeting; or,
without any such notice, by a vote of 2/3 of all of the members of the Board
of Directors.
Books and Records.
- -----------------
Section 7:5. Except as the Board of Directors may from time to time
direct or as may be required by law, the Company shall keep its books and
records at its principal office.
20
<PAGE> 24
Severability.
- ------------
Section 7:6. If any word, clause or provision of these By-Laws shall,
for any reason, be determined to be invalid or ineffective, the provisions
hereof shall not otherwise be affected thereby and shall remain in full force
and effect.
ARTICLE VIII: INDEMNIFICATION OF DIRECTORS,
------------ OFFICERS AND OTHERS; INSURANCE
------------------------------
Liabilities Covered
- -------------------
Section 8:1(a). The Company shall indemnify any person who was, or is
threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer
of the Company or (at the request of the Company and in addition to his or
her service as a director or officer of the Company) is or was serving as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceedings, to the full extent and under the circumstances permitted by law.
For the purposes of this ARTICLE VIII, "officer" shall mean each person
elected, or requested to serve, as an officer by the Board of Directors of
the Company and any other person serving as an officer shall not be an
officer for the purposes of this ARTICLE VIII but may be indemnified as an
employee or agent of the Company or other enterprise.
Section 8:1(b). In addition, the Company may (but shall not be
obligated to) indemnify any person who was or is threatened to be made, a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the
fact that he is or was an employee or agent of the Company or is or was
serving at the request of the Company as an employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceedings, to the full extent and under the circumstances
permitted by law.
Section 8:1(c). The Company shall not be obligated to indemnify any
person in connection with his service as a director, officer, employee or
agent of a constituent corporation merged into
21
<PAGE> 25
or consolidated with the Company, or his service at the request of such a
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise; provided,
however, such person may be indemnified, to the full extent and under the
circumstances permitted by law, if in connection with such merger or
consolidation, the Board of Directors of the Company so directs or the
agreement providing for such merger or consolidation so provides.
Section 8:1(d). If this Section 8:1 is approved by a vote of the
stockholders of the Company, indemnification shall or may (as the case may
be) be provided hereunder unless the conduct of the person to be indemnified
is finally adjudged to have been knowingly fraudulent, deliberately dishonest
or willful misconduct.
Section 8:1(e). Notwithstanding anything set forth herein, no
indemnity shall be paid by the Company (i) in respect of remuneration paid to
any person if it shall be determined by a final judgment or other final
adjudication that such remuneration was in violation of law, or (ii) on
account of any suit in which judgment is rendered against any person (seeking
indemnification hereunder) for an accounting of profits made from the
purchase or sale by such person of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or similar provisions of any federal, state or local
statutory law.
Procedures for Indemnification.
- ------------------------------
Section 8:2. Any indemnification under Section 8:1(a) of this ARTICLE
VIII (unless ordered by a court) shall be made by the Company unless a
determination is reasonably and promptly made that indemnification is not
proper in the circumstances because the person to be indemnified has not
satisfied the conditions set forth in such Section 8:1. Any indemnification
under Section 8:1(b) of this ARTICLE VIII (unless ordered by a court) shall
be made as authorized in a specified case upon a determination that
indemnification is proper in the circumstances because the person to be
indemnified has satisfied the conditions set forth in such Section 8:1. Any
such determination shall be made (1) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (2) if such a quorum is not obtainable, or even if
obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
22
<PAGE> 26
Advance Payment of Expenses.
- ---------------------------
Section 8:3(a). With respect to any person entitled to be indemnified
under Section 8:1(a) of this ARTICLE VIII, expenses incurred in defending a
civil or criminal action, suit or proceeding shall be paid by the Company in
advance of the final disposition of the action, suit or proceeding upon
receipt of an undertaking by or on behalf of the person seeking such advance
to repay such amount if it shall ultimately be determined that such person is
not entitled to be indemnified by the Company as authorized in this ARTICLE
VIII.
Section 8:3(b). With respect to any person who may be indemnified
under Section 8:1(b) of this ARTICLE VIII, expenses incurred in defending a
civil or criminal action, suit or proceeding may be paid by the Company in
advance of the final disposition of the action, suit or proceeding as
authorized by the Board of Directors in a specific case upon receipt of an
undertaking by or on behalf of the person seeking such indemnification to
repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Company as authorized in this ARTICLE VIII.
Extent of Rights Hereunder.
- --------------------------
Section 8:4. The foregoing rights of indemnification shall not be
deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any By-Law, agreement, vote of stockholders of
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee or other agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
Purchase of Insurance.
- ---------------------
Section 8:5. The directors may authorize, to the extent permitted by
The General and Business Corporation Law of Missouri, as in effect and
applicable from time to time, the purchase and maintenance of insurance on
behalf of any person who is or was a director, officer, employee or agent of
the Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another company, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in such capacity or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability under the provisions of The General and Business Corporation Law of
Missouri.
23
<PAGE> 27
Indemnification Agreements.
- --------------------------
Section 8:6. With respect to any of the persons who shall or may be
indemnified pursuant to Section 8:1 of this ARTICLE VIII, the Company may
enter into written agreements providing for the mandatory indemnification of
such persons in accordance with the provisions of this ARTICLE VIII. In the
event of any conflict between the provisions of this ARTICLE VIII and the
provisions of an indemnification agreement adopted by the stockholders, the
terms of such agreement shall prevail.
24
<PAGE> 1
Exhibit 10.3
ANGELICA CORPORATION
FORM 10-K FOR FISCAL YEAR ENDED
JANUARY 25, 1997
SCHEDULE
--------
The participation agreements presently in effect under the Angelica
Corporation Management Retention and Incentive Plan are substantially
identical in all material respects. This revised schedule is included
pursuant to Instruction 2 of Item 601(a) of Regulation S-K for the purpose of
setting forth the material details in which the specific agreements differ
from the form of agreement filed as Exhibit 10.3 to the Angelica Corporation
Form 10-K for fiscal year ended 1/30/93:
<TABLE>
<CAPTION>
"Benefit Multiple"
Name Title Pursuant to Paragraph 3
- ---- ------ -----------------------
<S> <C> <C>
T. M. Armstrong Sr. Vice President-Finance 2.99
and Administration
M. E. Burnham Vice President 2.99
L. L. Mann Controller and Assistant Secretary 2.99
J. Witter Vice President, General Counsel & 2.99
Secretary
A. D. Wilson Vice President 2.99
L. J. Young Chairman of the Board, Chief Executive 2.99
Officer and President
</TABLE>
<PAGE> 1
Exhibit 10.21
ANGELICA CORPORATION
FORM 10-K FOR FISCAL YEAR ENDED
JANUARY 25, 1997
SCHEDULE
The stock option agreements under the 1994 Performance Plan for grants dated
December 2, 1996 with four of the Company's executive officers, which are
listed below, are substantially identical in all material respects. This
schedule is included pursuant to Instruction 2 of Item 601(a) of Regulation
S-K for the purpose of setting forth the material details in which the
specific stock option agreements differ from the form of agreement filed as
Exhibit 10.21 to the Angelica Corporation Form 10-K for the fiscal year ended
1/27/96:
Paragraph 2 (b) was added: "(b) if any of the events set forth in the first
paragraph of Section 4.2 of Optionee's Employment Agreement dated November
27, 1996 (the "Employment Agreement") occurs, then the Option will be
exercisable in full by Optionee as of the Entitlement Date (as defined in the
Employment Agreement). In each of the above-described circumstances, the
Option shall continue to be exercisable until such Option terminates pursuant
to the applicable provision of Section 3.b. of this Agreement."
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
T. M. Armstrong Sr. Vice President - Finance and Administration
L. Linden Mann Controller and Assistant Secretary
Jill Witter Vice President, General Counsel & Secretary
L. J. Young Chairman of the Board, Chief Executive Officer and President
</TABLE>
<PAGE> 1
Exhibit 10.22
ANGELICA CORPORATION
FORM 10-K FOR FISCAL YEAR ENDED
JANUARY 25, 1997
SCHEDULE
The indemnification agreements presently in effect between the Company and
its Directors and executive officers as of various dates are substantially
identical in all material respects. This schedule is included pursuant to
Instruction 2 of Item 601(a) of Regulation S-K for the purpose of identifying
the Directors and executive officers executing such agreements:
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
Earle H. Harbison, Jr. Director
L. F. Loewe Director
Charles W. Mueller Director
William A. Peck Director
Elliot H. Stein Director
William P. Stiritz Director
H. Edwin Trusheim Director
Lawrence J. Young Chairman of the Board, Chief
Executive Officer and President
T. M. Armstrong Sr. Vice President-Finance and
Administration
Michael E. Burnham Vice President
Thomas M. Degnan Treasurer
L. Linden Mann Controller and Assistant Secretary
Alan D. Wilson Vice President
Jill Witter Vice President, General Counsel &
Secretary
</TABLE>
<PAGE> 2
INDEMNIFICATION AGREEMENT
-------------------------
THIS AGREEMENT, is made and entered into as of the ----- day of
- -----------, 199--, by and between ANGELICA CORPORATION, a Missouri
corporation ("Company"), and ------------------------ ("Indemnified Person").
W I T N E S S E T H:
---------------------
WHEREAS, Indemnified Person is a member of the Board of Directors
and/or an officer of Company and in such capacity is performing a valuable
service for Company; and
WHEREAS, Company presently maintains a policy or policies of Directors
and Officers Liability Insurance ("D & O Insurance"), insuring against
certain liabilities which may be incurred by its directors and officers in
the performance of their services for the Company; and
WHEREAS, the cost of such insurance is increasing substantially and the
coverage of such insurance is decreasing, and Company deems it desirable,
with the consent and approval of its stockholders, to enter into agreements
with the Directors and Officers to provide to them broader indemnities and
greater protection against liabilities incurred by them on account of their
services for the Company;
NOW, THEREFORE, in consideration of the continued service of
Indemnified Person as a Director and/or officer after the date hereof, the
parties hereto agree as follows:
1. Indemnity
---------
1.1. Company shall indemnify and hold Indemnified Person
harmless to the full extent authorized or permitted by the provisions of The
General and Business Corporation Law of Missouri, as in effect at the date of
this Agreement, or by any amendment thereof or any other statutory provisions
authorizing or permitting such indemnification which may be adopted after the
date hereof.
1.2. Without limiting the indemnity provided under Section 1.1
hereof, and subject only to the limitations set forth in Section 4 hereof, if
Indemnified Person was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding (whether
civil, criminal, administrative or investigative, or whether an action by a
third party or by or in the right of Company) by reason of the fact that
Indemnified Person is or was a director or officer of Company (or, if his
service is or was at the request of Company, as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise), then Company shall indemnify Indemnified Person against expenses
(including attorney's
-2-
<PAGE> 3
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by Indemnified Person in connection with such action, suit or
proceeding.
1.3. The costs and expenses incurred by Indemnified Person in
connection with any proceedings described in this Section 1 shall be paid by
Company in advance of the final disposition of such proceeding with the
understanding and agreement hereby made and entered into by Indemnified
Person that Indemnified Person shall repay to Company such amount, or the
appropriate portion thereof, so paid or advanced if it shall ultimately be
determined that Indemnified Person was not entitled to be indemnified by
Company hereunder.
1.4. If Indemnified Person is deceased and is or was entitled to
indemnification under any provision of this Agreement, such indemnification
shall continue and shall inure to the benefit of the heirs, executors and
administrators of Indemnified Person.
2. Maintenance of Insurance
------------------------
2.1. Company has in force and effect D & O Insurance which
provides insurance protection to its directors and officers against certain
liabilities which may be incurred by them on account of services for
Company. Company may, but shall not be required to, continue all or any part
of said insurance coverage in effect. If such insurance coverage shall be
maintained by Company, such insurance, to the extent of the coverage
provided thereby, shall be primary and Company's agreement of indemnity
hereunder shall be effective only to the extent that the Indemnified Person
is not reimbursed pursuant to such insurance coverage, and if Company shall
have advanced any amount to or for Indemnified Person which is later
recovered by Indemnified Person under such insurance coverage, Indemnified
Person shall repay such recovered amount to Company. If such insurance shall
not be maintained by Company, Indemnified Person shall be indemnified fully
by Company in accordance with the provisions of Section 1 of this Agreement.
3. Determination of Right to Indemnification
-----------------------------------------
3.1. The indemnification under Section 1 hereof shall be made by
the Company unless a determination is reasonably and promptly made that
indemnification is not proper in the circumstances because of the limitations
set forth in Section 4 hereof. Any such determination shall be made (unless
ordered by a court) by the Board of Directors of Company, by a majority vote
of quorum consisting of directors who were not parties to such action, suit
or proceeding.
3.2. In the event that a quorum of directors who were not
parties to such action, suit or proceeding is not available, or even if
available, if a quorum of disinterested directors so
-3-
<PAGE> 4
directs, such determination shall be made by independent legal counsel in a
written opinion. The fees and expenses of counsel in connection with making
said determination contemplated hereunder shall be paid by Company.
3.3. If the person (including the Board of Directors,
independent legal counsel or a court) making the determination hereunder
shall determine that Indemnified Person is entitled to indemnification as to
some claims, issues or matters involved in the action, suit or proceeding but
not as to others, such person shall reasonably prorate the expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to which indemnification is sought by Indemnified Person among
such claims, issues and matters.
4. Limitations on Indemnity No indemnity pursuant to Section 1
------------------------
hereof shall be paid by Company:
(a) In respect of remuneration paid to Indemnified Person
if it shall be determined by a final judgment or other final
adjudication that such remuneration was in violation of law;
(b) On account of any suit in which judgment is rendered
against Indemnified Person for an accounting of profits made
from the purchase or sale by Indemnified Person of
securities of Company pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any federal, state or local
statutory law; or
(c) If Indemnified Person's conduct is finally adjudged to
have been knowingly fraudulent, deliberately dishonest, or
willful misconduct.
5. Continuation of Indemnity All agreements and obligations of
-------------------------
Company contained herein shall continue during the period Indemnified Person
is a director and/or officer of Company (or is or was serving at the request
of Company as a director and/or officer of another corporation, partnership,
joint venture, trust or other enterprise) and shall continue thereafter so
long as Indemnified Person shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Indemnified Person is
or was a director and/or officer of Company or serving in any other capacity
referred to herein.
6. Notice to Company; Defense and Settlement of Claims
---------------------------------------------------
6.1. Indemnified Person shall promptly notify Company in writing
upon being served with any citation, petition, complaint,
-4-
<PAGE> 5
indictment or other document relating to any proceeding which could give rise
to indemnification hereunder. The omission so to notify Company shall not
relieve Company from any liability which it may have to Indemnified Person
otherwise than under this Agreement.
6.2. With respect to any action, suit or proceeding as to which
Indemnified Person notifies Company of the commencement thereof:
(a) Company will be entitled to participate therein at
its own expense.
(b) Except as otherwise provided below, to the extent
that it may wish, Company jointly with any other
indemnifying party similarly notified will be entitled
to assume the defense thereof, with counsel
satisfactory to Indemnified Person. After notice from
Company to Indemnified Person of its election so to
assume the defense thereof, Company will not be liable
to Indemnified Person under this Agreement for any
legal or other expenses subsequently incurred by
Indemnified Person in connection with the defense
thereof other than as otherwise provided below.
Indemnified Person shall have the right to employ his
or her own counsel in such action, suit or proceeding,
but the fees and expenses of such counsel incurred
after notice from Company of its assumption of the
defense thereof shall be at the expense of Indemnified
Person unless (i) the employment of counsel by
Indemnified Person has been authorized by Company; or
(ii) Company shall not in fact have employed counsel
to assume the defense of such action, in each of
which cases the fees and expenses of counsel shall be
at the expense of Company.
(c) Company shall not be liable to indemnify Indemnified
Person under this Agreement for any amounts paid in
settlement of any action or claim effected without its
written consent. Company shall not settle any action
or claim in any manner which would impose any penalty
or limitation on Indemnified Person without Indemnified
Person's written consent. Neither Company nor
Indemnified Person will reasonably withhold its consent
to any proposed settlement.
7. Other Rights and Remedies The indemnification and advance
-------------------------
payment of expenses provided by any provision of this
-5-
<PAGE> 6
Agreement shall not be deemed exclusive of any other rights to which Indemnified
Person may be entitled under any provision of the Articles of Incorporation or
By-Laws of Company, any agreement, any vote of stockholders or disinterested
directors, or otherwise.
8. Enforcement
-----------
8.1. Company expressly confirms that it has entered into this
Agreement and assumed the obligations imposed on Company hereby in order to
induce Indemnified Person to continue as a director and/or officer of
Company, and acknowledges that Indemnified Person is relying upon this
Agreement in continuing in such capacity.
8.2. In the event Indemnified Person is required to bring any
action to enforce rights or to collect monies due under this Agreement and is
successful in such action, Company shall reimburse Indemnified Person for all
of Indemnified Person's reasonable fees and expenses in bringing and pursuing
such action.
9. Notices
-------
9.1. All notices, requests, demands or other communications
hereunder shall be by United States mail, certified or registered, return
receipt requested, with postage prepaid, addressed to the intended recipient
as follows:
(a) If to Indemnified Person, to the address indicated on
the signature page hereof; or
(b) If to Company, to:
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
Attn: President
9.2. Either party may change its, his or her address for notices
hereunder by giving written notice to the other party in the manner set forth
above. Any notice, request, demand or other communication hereunder shall be
deemed given on the third business day after it is deposited in the United
States mail in the manner set forth above.
10. Severability If any provision or provisions of this Agreement
------------
shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby, and to the fullest extent possible, the provisions of this Agreement
(including, without limitation, all portions of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that are not
themselves
-6-
<PAGE> 7
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested by the provisions held invalid, illegal or unenforceable.
11. Miscellaneous
-------------
11.1. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
11.2. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both of the parties hereto.
No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar)
nor shall such waiver constitute a continuing waiver.
11.3. The parties hereto agree that this Agreement shall be
construed and enforced in accordance with, and governed by, the laws of the
state of Missouri.
11.4. This Agreement shall be binding upon Company and its
successors and assigns and shall inure to the benefit of Indemnified Person
and his or her spouse, heirs, executors and administrators.
11.5. In the event Company shall make any payment to or on
behalf of Indemnified Person under the terms of this Agreement, whether in
satisfaction of any judgment, payment in settlement, reimbursement of
expenses, or otherwise, Company shall succeed to, and have by way of
subrogation, all of the rights theretofore possessed by Indemnified Person
against any other person, firm or corporation for or on account of the
lawsuit, claim or matter in respect of which the payment was made, including,
without limitation, full subrogation to claim any right Indemnified Person
had or may have had against any insurance company providing D & O Insurance
to Company, its officers and directors.
-7-
<PAGE> 8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
ANGELICA CORPORATION
By:-----------------------------
Chairman of the Board
ATTEST
- ----------------------------
Secretary
--------------------------------
"Indemnified Person"
-8-
<PAGE> 1
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into this
27th day of November, 1996, by and between Angelica Corporation, a
Missouri corporation ("Company"), and Lawrence J. Young, an
individual ("Executive").
RECITALS
The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its
stockholders to reinforce and encourage the continued attention and
dedication of the Executive to the Company as a member of the
Company's management and to assure that the Company will have the
continued dedication of the Executive, notwithstanding the
possibility or occurrence of a Triggering Transaction (as defined
below) with respect to the Company or any of its Operating Lines of
Business (as defined below). The Board desires to provide for the
continued employment of the Executive on terms competitive with
those of other corporations, and the Executive is willing to
rededicate himself and continue to serve the Company.
Additionally, the Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a potential or pending
Triggering Transaction and to encourage the Executive's full
attention and dedication to the Company currently and in the event
of any potential or pending Triggering Transaction, and to provide
the Executive with compensation and benefits arrangements upon any
breach of this Agreement by the Company or upon a termination of
employment either immediately prior to or after a Triggering
Transaction which ensure that the compensation and benefits
expectations of the Executive will be satisfied. Therefore, in
order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
IT IS AGREED AS FOLLOWS:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the
following words and phrases, whether or not capitalized, shall have
the meanings specified below, unless the context plainly requires
a different meaning.
1.1(a) "ACCRUED COMPENSATION" has the meaning
set forth in Section 4.5 of this Agreement.
1.1(b) "ACCRUED OBLIGATIONS" has the meaning set
forth in Section 4.1(a) of this Agreement.
1.1(c) "ANNUAL BASE SALARY" has the meaning set
forth in Section 2.4(a) of this Agreement.
1.1(d) "BOARD" means the Board of Directors of
the Company.
1.1(e) "CAUSE" has the meaning set forth in
Section 3.3 of this Agreement.
<PAGE> 2
1.1(f) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual,
entity or group, or a Person (within the
meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) of ownership of 30%
or more of either (a) the then
outstanding shares of common stock of the
Company (the "Outstanding Company Common
Stock") or (b) the combined voting power
of the then outstanding voting securities
of the Company entitled to vote generally
in the election of directors (the
"Outstanding Company Voting Securities");
or
(ii) Individuals who, as the date
hereof, constitute the Board (the
"Incumbent Board") cease for any reason
to constitute at least a majority of the
Board; provided, however, that any
-----------------
individual becoming a director subsequent
to the date hereof whose election, or
nomination for election by the Company's
stockholders, was approved by a vote of
at least a majority of the directors then
comprising the Incumbent Board shall be
considered as though such individual were
a member of the Incumbent Board, but
excluding, as a member of the Incumbent
Board, any such individual whose initial
assumption of office occurs as a result
of either an actual or threatened
election contest (as such terms are used
in Rule l4a-11 of Regulation l4A
promulgated under the Exchange Act) or
other actual or threatened solicitation
of proxies or consents by or on behalf of
a Person other than the Board; or
(iii) Approval by the stockholders of
the Company of a reorganization, merger
or consolidation, in each case, unless,
following such reorganization, merger or
consolidation, (a) more than 50% of,
respectively, the then outstanding shares
of common stock of the corporation
resulting from such reorganization,
merger or consolidation and the combined
voting power of the then outstanding
voting securities of such corporation
entitled to vote generally in the
election of directors is then
beneficially owned, directly or
indirectly, by all or substantially all
of the individuals and entities who were
the beneficial owners, respectively, of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such reorganization,
merger or consolidation in substantially
the same proportions as their ownership,
immediately prior to such reorganization,
merger or consolidation, of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities, as
the case may be, (b) no Person
beneficially owns, directly or
indirectly, 30% or more of, respectively,
the then outstanding shares of common
stock of the corporation resulting from
such reorganization, merger or
consolidation or the combined voting
power of the then outstanding voting
securities of such corporation, entitled
to vote generally in the election of
directors and (c) at least a majority of
the members of the board of directors of
the corporation resulting from such
reorganization, merger or consolidation
were members of the Incumbent Board at
the time of the execution of the initial
agreement providing for such
reorganization, merger or consolidation;
or
-2-
<PAGE> 3
(iv) Approval by the stockholders of the
Company of (a) a complete liquidation or
dissolution of the Company or (b) the
sale or other disposition of all or
substantially all of the assets of the
Company, other than to a corporation,
with respect to which following such sale
or other disposition, (1) more than 50%
of, respectively, the then outstanding
shares of common stock of such
corporation and the combined voting power
of the then outstanding voting securities
of such corporation entitled to vote
generally in the election of directors is
then beneficially owned, directly or
indirectly, by all or substantially all
of the individuals and entities who were
the beneficial owners, respectively, of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such sale or other
disposition in substantially the same
proportion as their ownership,
immediately prior to such sale or other
disposition, of the Outstanding Company
Common Stock and Outstanding Company
Voting Securities, as the case may be,
(2) no Person beneficially owns, directly
or indirectly, 30% or more of,
respectively, the then outstanding shares
of common stock of such corporation and
the combined voting power of the then
outstanding voting securities of such
corporation entitled to vote generally in
the election of directors and (3) at
least a majority of the members of the
board of directors of such corporation
were members of the Incumbent Board at
the time of the execution of the initial
agreement or action of the Board
providing for such sale or other
disposition of assets of the Company.
1.1(g) "COMPANY" has the meaning set forth in
the first paragraph of this Agreement and, with
regard to successors, in Section 6.2 of this
Agreement.
1.1(h) "CODE" shall mean the Internal Revenue
Code of 1986, as amended.
1.1(i) "CURRENT TARGET BONUS" has the meaning
set forth in Section 4.1(a) of this Agreement.
1.1(j) "DATE OF TERMINATION" has the meaning set
forth in Section 3.6 of this Agreement.
1.1(k) "DISABILITY" has the meaning set forth in
Section 3.2 of this Agreement.
1.1(l) "DISABILITY EFFECTIVE DATE" has the
meaning set forth in Section 3.2 of this Agreement.
1.1(m) "DISPOSITION OF A MAJOR PART" means:
(i) when used with reference to the
stock of an Operating Line of Business
that is or becomes a separate
corporation, limited liability
corporation, partnership or other
business entity, the sale, exchange,
transfer, distribution or other
disposition of the ownership, either
beneficially or of record or both, by the
Company of more than 50% of either (a)
the then outstanding shares of common
stock (or the equivalent equity
interests) of such Operating Line of
Business, or (b) the combined voting
power of the then outstanding voting
-3-
<PAGE> 4
securities of such Operating Line of
Business entitled to vote generally in
the election of the Board or the
equivalent governing body of the
Operating Line of Business;
(ii) when used with reference to the
merger or consolidation of an Operating
Line of Business that is or becomes a
separate corporation, limited liability
corporation, partnership or other
business entity, any such transaction
that results in the Company owning,
either beneficially or of record or both,
less that 50% of either (a) the then
outstanding shares of common stock (or
the equivalent equity interests) of such
Operating Line of Business, or (b) the
combined voting power of the then
outstanding voting securities of such
Operating Line of Business entitled to
vote generally in the election of the
Board or the equivalent governing body of
the Operating Line of Business; or
(iii) when used with reference to the
assets of an Operating Line of Business,
the sale, exchange, transfer,
liquidation, distribution or other
disposition of assets of such Operating
Line of Business (a) having a fair market
value (as determined by the Incumbent
Board) aggregating more than 50% of the
aggregate fair market value of all of the
assets of such Operating Line of Business
as of the Triggering Transaction Date,
(b) accounting for more than 50% of the
aggregate book value (net of depreciation
and amortization) of all of the assets of
such Operating Line of Business, as would
be shown on a balance sheet for such
Operating Line of Business, prepared in
accordance with generally accepted
accounting principles then in effect, as
of the Triggering Transaction Date; or
(c) accounting for more than 50% of the
net income of such Operating Line of
Business, as would be shown on an income
statement, prepared in accordance with
generally accepted accounting principles
then in effect, for the 12 months ending
on the last day of the month immediately
preceding the month in which the
Triggering Transaction Date occurs.
1.1(n) "EFFECTIVE DATE" means the date of this
Agreement.
1.1(o) "EMPLOYMENT PERIOD" means the period
beginning on the Effective Date and ending on the
later of (i) December 31, 1999, or (ii) December 31
of any succeeding fiscal year during which notice
is given by either party (as described in
Section 1.1(dd) of this Agreement) of such party's
intent not to renew this Agreement.
1.1(p) "EXCHANGE ACT" means the Securities
Exchange Act of 1934, as amended.
1.1(q) "EXCISE TAX" has the meaning set forth in
Section 4.2(e) of this Agreement.
1.1(r) "GOOD REASON" has the meaning set forth
in Section 3.4 of this Agreement.
1.1(s) "GROSS-UP PAYMENT" has the meaning set
forth in Section 4.2(i) of this Agreement.
-4-
<PAGE> 5
1.1(t) "INCENTIVE BONUS" has the meaning set
forth in Section 2.4(b) of this Agreement.
1.1(u) "INCUMBENT BOARD" has the meaning set
forth in Section 1.1(f)(ii) of this Agreement.
1.1(v) "NOTICE OF TERMINATION" has the meaning
set forth in Section 3.5 of this Agreement.
1.1(w) "OPERATING LINES OF BUSINESS" means the
following lines of business of the Company, whether
operated as a division or as a separate subsidiary:
(i) textile rental and laundry services, which
provides textiles and laundry services, principally
to health care institutions, and, to a more limited
extent, to hotels, casinos, motels and restaurants
in or near major metropolitan areas of the United
States; (ii) uniform and business apparel
manufacturing and marketing, which manufactures and
sells uniforms and business apparel to a wide
variety of institutions and businesses in the
United States, Canada and the United Kingdom; and
(iii) retail specialty stores, which operates a
nationwide chain of specialty retail stores
primarily for a clientele of nurses and other
health care professionals.
1.1(x) "OTHER BENEFITS" has the meaning set
forth in Section 4.1(d) of this Agreement.
1.1(y) "OUTSTANDING COMPANY COMMON STOCK" has
the meaning set forth in Section 1.1(f)(i) of this
Agreement.
1.1(z) "OUTSTANDING COMPANY VOTING SECURITIES"
has the meaning set forth in Section 1.1(f)(i) of
this Agreement.
1.1(aa) "PAYMENT" has the meaning set forth in
Section 4.2(i) of this Agreement.
1.1(bb) "PERSON" means any "person" within the
meaning of Sections 13(d) and 14(d) of the Exchange
Act.
1.1(cc) "SUPPLEMENTAL PLAN" has the meaning set
forth in Section 4.2(e) of this Agreement.
1.1(dd) "TERM" means the period that begins on
the Effective Date and ends on the earlier of: (i)
the Date of Termination as defined in Section 3.6
of this Agreement, or (ii) the close of business on
the later of December 31, 1999 or December 31 of
any renewal term as set forth in Section 2.1 of
this Agreement.
1.1(ee) "TRIGGERING TRANSACTION" means (i) a
Change in Control of the Company or (ii) a
Disposition of a Major Part of two or more of the
Company's Operating Lines of Business.
1.1(ff) "TRIGGERING TRANSACTION DATE" shall mean
the date of the Triggering Transaction.
-5-
<PAGE> 6
1.2 GENDER AND NUMBER. When appropriate, pronouns in
this Agreement used in the masculine gender include the feminine
gender, words in the singular include the plural, and words in the
plural include the singular.
1.3 HEADINGS. All headings in this Agreement are
included solely for ease of reference and do not bear on the
interpretation of the text. Accordingly, as used in this
Agreement, the terms "Article" and "Section" mean the text that
accompanies the specified Article or Section of the Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Missouri,
without reference to its conflict of law principles.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT. The Executive shall remain in
the employ of the Company throughout the Term of this Agreement in
accordance with the terms and provisions of this Agreement. This
Agreement will automatically renew for annual one-year periods
unless either party gives the other written notice, by September
30, 1999, or September 30 of any succeeding year, of such party's
intent not to renew this Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Term of this Agreement, the
Executive shall serve as Chairman of the Board and
President of the Company subject to the reasonable
directions of the Board. The Executive shall have such
authority and shall perform such duties as are specified
by the Bylaws of the Company for the office to which he
has been appointed hereunder and shall so serve, subject
to the control exercised by the Board from time to time.
Additionally, each year throughout the Term of the
Executive's service as Chairman of the Board and
President, the Executive shall be nominated to serve as
member of the Board.
2.2(b) Throughout the Term of this Agreement (but
excluding any periods of vacation and sick leave to which
the Executive is entitled), the Executive shall devote
reasonable attention and time during normal business
hours to the business and affairs of the Company and
shall use his reasonable best efforts to perform
faithfully and efficiently such responsibilities as are
assigned to him under or in accordance with this
Agreement; provided that, it shall not be a violation of
this paragraph for the Executive to (i) serve on
corporate, civic or charitable boards or committees,
(ii) deliver lectures or fulfill speaking engagements, or
(iii) manage personal investments, so long as such
activities do not significantly interfere with the
performance of the Executive's responsibilities as an
employee of the Company in accordance with this Agreement
or violate the Company's conflict of interest policy as
in effect immediately prior to the Effective Date.
2.3 SITUS OF EMPLOYMENT. Throughout the Term of this
Agreement, the Executive's services shall be performed at the
location where the Executive was employed immediately prior to the
Effective Date, or any office of the Company which is located in
the greater St. Louis area.
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<PAGE> 7
2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. For the first calendar
year within the Term of this Agreement, the Executive
shall receive an annual base salary ("Annual Base
Salary") of two hundred and sixty thousand dollars
($260,000.00), which shall be paid in equal or
substantially equal semi-monthly installments. During
the Term of this Agreement, the Annual Base Salary
payable to the Executive shall be reviewed at least
annually and shall be increased at the discretion of the
Board or the Compensation Committee of the Board but
shall not be reduced.
2.4(b) INCENTIVE BONUSES. In addition to Annual Base
Salary, the Executive shall be awarded the opportunity to
earn an incentive bonus on an annual basis ("Incentive
Bonus") under any incentive compensation plan which are
generally available to other peer executives of the
Company. During the Term of this Agreement, the annual
target Incentive Bonus which the Executive will have the
opportunity to earn shall be reviewed at least annually
and be increased at the discretion of the Board or the
Compensation Committee of the Board, but in no case shall
such target annual Incentive Bonus which the Executive
will have the opportunity to earn be reduced below One
Hundred and Eighty-Five Thousand Dollars ($185,000) and,
further, in no event shall the Executive receive less
than 50% of such annual target Incentive Bonus.
2.4(c) INCENTIVE, SAVINGS AND RETIREMENT PLANS.
Throughout the Term of this Agreement, the Executive
shall be entitled to participate in all incentive,
savings and retirement plans generally available to other
peer executives of the Company.
2.4(d) WELFARE BENEFIT PLANS. Throughout the Term of
this Agreement (and thereafter, subject to Sections
4.1(c) and 4.2(g) hereof), the Executive and/or the
Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs
provided by the Company (including, without limitation,
medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death
and travel accident insurance plans and programs) to the
extent generally available to other peer executives of
the Company.
2.4(e) EXPENSES. Throughout the Term of this
Agreement, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the policies,
practices and procedures generally applicable to other
peer executives of the Company.
2.4(f) FRINGE BENEFITS. Throughout the Term of this
Agreement, the Executive shall be entitled to such fringe
benefits as generally are provided to other peer
executives of the Company.
2.4(g) OFFICE AND SUPPORT STAFF. Throughout the Term
of this Agreement, the Executive shall be entitled to an
office or offices of a size and with furnishings and
other appointments, and to personal secretarial and other
assistance, at least equal to those generally provided to
other peer executives of the Company.
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<PAGE> 8
2.4(h) VACATION. Throughout the Term of this
Agreement, the Executive shall be entitled to paid
vacation in accordance with the plans, policies, programs
and practices generally provided with respect to other
peer executives of the Company.
SECTION 3: TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment
Period.
3.2 DISABILITY. If the Company determines in good faith
that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability set
forth below), the Company may give to the Executive written notice
in accordance with Section 7.2 of its intention to terminate the
Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the thirtieth (30th)
day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the thirty (30) days after
such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean that the Executive has been
unable to perform the services required of the Executive hereunder
on a full-time basis for a period of one hundred eighty (180)
consecutive business days by reason of a physical and/or mental
condition. "Disability" shall be deemed to exist when certified by
a physician selected by the Company and acceptable to the Executive
or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Executive will
submit to such medical or psychiatric examinations and tests as
such physician deems necessary to make any such Disability
determination.
3.3 TERMINATION FOR CAUSE. The Company may terminate
the Executive's employment during the Employment Period for
"Cause," which shall mean termination based upon: (i) the
Executive's willful and continued failure to substantially perform
his duties with the Company (other than as a result of incapacity
due to physical or mental condition), after a written demand for
substantial performance is delivered to the Executive by the
Company, which specifically identifies the manner in which the
Executive has not substantially performed his duties, (ii) the
Executive's commission of an act constituting a criminal offense
involving moral turpitude, dishonesty, or breach of trust, or (iii)
the Executive's material breach of any provision of this Agreement.
For purposes of this Section, no act, or failure to act on the
Executive's part shall be considered "willful" unless done, or
omitted to be done, without good faith and without reasonable
belief that the act or omission was in the best interest of the
Company. Notwithstanding the foregoing, the Executive shall not be
deemed to have been terminated for Cause unless and until (i) he
receives a Notice of Termination from the Company, (ii) he is given
the opportunity, with counsel to be heard before the Board, and
(iii) the Board finds, in its good faith opinion, the Executive was
guilty of the conduct set forth in the Notice of Termination.
3.4 GOOD REASON. The Executive may terminate his
employment with the Company for "Good Reason," which shall mean:
3.4(a) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 2.2(a) or any other action by the
Company which results in a material diminution in such
position, authority, duties or responsibilities,
excluding for this purpose any action not taken in bad
faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
-8-
<PAGE> 9
3.4(b) (i) the failure by the Company to continue in
effect any benefit or compensation plan, stock ownership
plan, life insurance plan, health and accident plan or
disability plan to which the Executive is entitled as
specified in Section 2.4, (ii) the taking of any action
by the Company which would adversely affect the
Executive's participation in, or materially reduce the
Executive's benefits under, any plans described in
Section 2.4, or deprive the Executive of any material
fringe benefit enjoyed by the Executive as described in
Section 2.4(f), or (iii) the failure by the Company to
provide the Executive with paid vacation to which the
Executive is entitled as described in Section 2.4(h).
3.4(c) the Company's requiring the Executive to be
based at any office or location other than that described
in Section 2.3;
3.4(d) a material breach by the Company of any
provision of this Agreement;
3.4(e) any purported termination by the Company of the
Executive's employment otherwise than as expressly
permitted by this Agreement; or
3.4(f) within a period ending at the close of business
on the date two (2) years after the Triggering
Transaction Date of any Change in Control, if the Company
has failed to comply with and satisfy Section 6.2 on or
after such Triggering Transaction Date.
For purposes of this Section, any good faith
determination of "Good Reason" made by the Executive
shall be conclusive.
3.5 NOTICE OF TERMINATION. Any termination by the
Company for Cause or Disability, or by the Executive for Good
Reason, shall be communicated by Notice of Termination to the other
party, given in accordance with Section 7.2. For purposes of this
Agreement, a "Notice of Termination" means a written notice which
(i) indicates the specific termination provision in this Agreement
relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the Date of Termination (as
defined in Section 3.6 hereof) is other than the date of receipt of
such notice, specifies the termination date (which date shall be
not more than fifteen (15) days after the giving of such notice).
The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason or Cause shall not waive any right of the
Executive or the Company hereunder or preclude the Executive or the
Company from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
3.6 DATE OF TERMINATION. "Date of Termination" means
(i) if the Executive's employment is terminated by the Company for
Cause, or by the Executive for Good Reason, the Date of Termination
shall be the date of receipt of the Notice of Termination or any
later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be,
or (iii) if the Executive's employment is terminated by the Company
other than for Cause, death, or Disability, the Date of Termination
shall be the date of receipt of the Notice of Termination; provided
that if within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written
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<PAGE> 10
agreement of the parties, or by a final judgment, order or decree of
a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected).
SECTION 4: CERTAIN BENEFITS UPON TERMINATION.
4.1 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON NOT
IN CONNECTION WITH A TRIGGERING TRANSACTION. If, prior to a
Triggering Transaction during the Employment Period (except in the
event that one of the following terminations of employment occurs
within the six-month period prior to the earlier of (a) a
Triggering Transaction or (b) the execution of a definitive
agreement or contract that eventually results in a Triggering
Transaction, which shall result in the payment of severance
benefits set forth in Section 4.2 of this Agreement): (i) the
Company shall terminate the Executive's employment without Cause,
or (ii) the Executive shall terminate employment with the Company
for Good Reason, the Executive shall be entitled to the payment of
the benefits provided below as of the Date of Termination:
4.1(a) Accrued Obligations. Within thirty (30) days
-------------------
after the Date of Termination, the Company shall pay to
the Executive the sum of (1) the Executive's Annual Base
Salary through the Date of Termination to the extent not
previously paid, (2) the accrued benefit payable to the
Executive under any deferred compensation plan, program
or arrangement in which the Executive is a participant
subject to the computation of benefits provisions of such
plan, program or arrangement, and (3) any accrued
vacation pay; in each case to the extent not previously
paid (the "Accrued Obligations").
In addition, on the date that Incentive Bonuses are
paid to other peer executives for the year in which the
Executive's employment is terminated, the Executive will
be paid an amount equal to the product of the Current
Target Bonus multiplied by a fraction, the numerator of
which is the number of days during the fiscal year for
which the Incentive Bonus is paid prior to the Date of
Termination and denominator of which is 365. For
purposes of this Agreement, the term "Current Target
Bonus" means the Incentive Bonus that would have been
paid to the Executive for the fiscal year in which the
termination of employment occurred, if the Executive's
employment had not been so terminated and the Executive
had earned 100% of the Incentive Bonus that he could have
earned for such year.
4.1(b) Annual Base Salary and Target Bonus
-----------------------------------
Continuation. For the remainder of the Employment
------------
Period, the Company shall pay to the Executive, the
Executive's then-current Annual Base Salary and Current
Target Bonus as would have been paid to the Executive had
the Executive remained in the Company's employ throughout
the Employment Period; provided that in all cases the
Executive shall receive, at minimum, the then-current
Annual Base Salary and Current Target Bonus for the
remainder of the Employment Period, or for a period
beginning on the Date of Termination and ending two years
thereafter, whichever is longer. The Company at any time
may elect to pay the balance of such payments then
remaining in a lump sum, in which case the total of such
payments shall be discounted to present value on the
basis of the applicable Federal short-term monthly rate
as determined according to Code Section 1274(d) for the
month in which the Executive's Date of Termination
occurred.
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<PAGE> 11
4.1(c) Medical and Health Benefit Continuation. For
---------------------------------------
a period of ten years beginning on the Date of
Termination, or such longer period as any plan, program,
practice or policy may provide, the Company shall
continue medical and health benefits to the Executive
and/or the Executive's family at least equal to those
which would have been provided to them in accordance with
the plans, programs, practices and policies described in
Section 2.4(d) if the Executive's employment had not been
terminated, in accordance with the plans, practices,
programs or policies of the Company as those provided
generally to other peer executives and their families;
provided, however, that if the Executive becomes
-----------------
reemployed with another employer and is eligible to
receive medical or health benefits under another
employer-provided plan, the medical and health benefits
described herein shall be secondary to those provided
under such other plan during such applicable period of
eligibility. In the event Executive is able to obtain
medical and health care coverage from a third party for
the duration of such coverage period that is at least as
good in all material respects as that described in the
immediately preceding sentence, Executive agrees to
accept, in lieu of such Company provided medical and
health benefits, a lump sum cash payment in an amount
equal in value to the entire cost to Executive on an
after-tax basis of such alternate medical and health care
coverage.
4.1(d) Other Benefits. To the extent not previously
--------------
paid or provided, the Company shall timely pay or provide
to the Executive and/or the Executive's family any other
amounts or benefits required to be paid or provided for
which the Executive and/or the Executive's family is
eligible to receive pursuant to this Agreement and under
any plan, program, policy or practice or contract or
agreement of the Company as those provided generally to
other peer executives and their families ("Other
Benefits").
4.2 BENEFITS UPON TERMINATION IN CONNECTION WITH A
TRIGGERING TRANSACTION. If (a) a Triggering Transaction occurs
during the Employment Period and within three years after the
Triggering Transaction Date (i) the Company shall terminate the
Executive's employment without Cause, or (ii) the Executive shall
terminate employment with the Company for Good Reason, or,
--
alternatively, (b) if one of the above-described terminations of
employment occurs within the six-month period prior to the earlier
of (i) a Triggering Transaction or (ii) the execution of a
definitive agreement or contract that eventually results in a
Triggering Transaction, then the Executive shall become entitled to
the payment of the benefits as provided below as of either (y) the
Date of Termination, in the case where the sequence of the
requisite events is as set forth in subsection (a) above or (z) the
Triggering Transaction Date, in the case where the sequence of the
requisite events occurred as set forth in subsection (b) above (the
relevant date for purposes of entitlement to the benefits set forth
in this Section 4.2 is hereinafter referred to as the "Entitlement
Date"):
4.2(a) Accrued Obligations. Within thirty (30) days
-------------------
after the Entitlement Date, the Company shall pay to the
Executive the Accrued Obligations.
In addition, on the date that Incentive Bonuses are
paid to other peer executives for the year in which the
Executive's employment is terminated, the Executive will
be paid an amount equal to the product of the Current
Target Bonus multiplied by a fraction, the numerator of
which is the number of days during the fiscal year for
which the Incentive Bonus is paid prior to the Date of
Termination and the denominator of which is 365.
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<PAGE> 12
4.2(b) Severance Amount. Within thirty (30) days
----------------
after the Entitlement Date, the Company shall pay to the
Executive as severance pay in a lump sum, in cash, an
amount equal to 2.99 times an amount equal to his then-
current Annual Base Salary and Current Target Bonus. In
the event such severance amount is payable pursuant to
this Section on account of a Triggering Transaction, and
the Executive is entitled to a benefit under Article IV
of the Angelica Corporation Management Retention and
Incentive Plan (the "Management Retention Plan") on
account of a Change in Control (as defined in the
Management Retention Plan), the Executive shall be
entitled to the larger of the amounts computed pursuant
to this Section and the amounts computed pursuant to the
Management Retention Plan without regard to this Section.
Such benefit shall be in lieu of any other benefit
payable pursuant to the Management Retention Plan.
4.2(c) Stock Options. To the extent not otherwise
-------------
provided for under the terms of the Company's stock
option plans or the Executive's stock option agreements,
all stock options held by the Executive that have not
expired in accordance with their respective terms shall
vest and become fully exercisable as of the Entitlement
Date.
4.2(d) Stock Bonus and Incentive Plan Shares. To the
-------------------------------------
extent not otherwise provided for under the terms of the
Company's Stock Bonus and Incentive Plan, all "Matching
Shares" (as defined in such plan) held by or for the
benefit of the Executive that are unvested and restricted
at the Date of Termination shall vest and become
unrestricted as of the Entitlement Date and all "Elected
Shares" (as defined in such plan) held by or for the
benefit of the Executive that are restricted at the Date
of Termination shall become unrestricted as of the
Entitlement Date.
4.2(e) Enhanced Supplemental Retirement Plan Benefits.
----------------------------------------------
The benefit payable to the Executive under the Angelica
Corporation Supplemental Plan (as originally effective
April 1, 1980 and as amended from time to time, including
a restatement as of January 23, 1990) (the "Supplemental
Plan") shall be determined taking into account the
following modifications:
(i) The amount payable to the Executive pursuant
to Section 4 of the Supplemental Plan shall be
determined on the basis of the service with
the Company the Executive would have completed
if he had continued to be employed by the
Company until he attained age 65; provided
such additional imputed service shall not
exceed ten years.
(ii) The Executive may begin to receive payments at
any time after he has reached age 55 without
any discount because the payments commence
before the Executive is age 65, regardless of
the provisions of Section 6 of the
Supplemental Plan.
(iii) In addition to the benefit payable to the
Executive as determined above, if the
Executive has not attained age 65 as of
his Entitlement Date, he shall be
entitled to receive a monthly benefit
equal to the amount of old-age insurance
benefit to which he would be entitled at
age 65 under the Social Security Act,
based upon the assumption that he will
continue to receive until reaching age 65
compensation that would be treated as
wages for purposes of the Social Security
Act at the same rate as he received such
compensation at the time of retirement or
severance,
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<PAGE> 13
which benefit shall commence on the
Executive's Entitlement Date and shall end
when the Executive attains the age of 65
years.
The Executive shall be entitled to receive his entire
benefit, including the enhanced benefits provided by this
Agreement, in a single lump sum cash payment within
thirty (30) days after the Entitlement Date, in which
case the total of such payments shall be discounted to
present value on the basis of the average of the interest
rates, as reported in the Wall Street Journal as of the
close of trading for the 20 days that immediately
preceded the Entitlement Date on which the New York Stock
Exchange was open for trading, of the shortest term U.S.
Treasury bond that matures at least 20 years after the
Entitlement Date. In the event enhanced Supplemental
Plan benefits are payable pursuant to this Section on
account of a Triggering Transaction, and the Executive is
entitled to a benefit under Section 10 of the
Supplemental Plan on account of a Change in Control (as
defined in the Supplemental Plan), the Executive shall be
entitled to the larger of the amounts computed pursuant
to this Section and the amounts computed pursuant to the
Supplemental Plan without regard to this Section. Such
benefit shall be in lieu of any other benefit payable
pursuant to the Supplemental Plan.
4.2(f) Enhanced Deferred Compensation Plan Benefits. For
--------------------------------------------
purposes of determining the amount payable to Executive
pursuant to the Angelica Corporation Deferred
Compensation Option Plan for Selected Management
Employees (the "Deferred Compensation Plan"), the
attained age of the Executive and years of service with
the Company shall be determined as if the Executive were
ten years older than his actual age (but not older than
age 65) and had continued to be employed by the Company
until age 65 (but not more than 10 years of imputed
service). The Executive shall be entitled to receive
such enhanced benefit in a single lump sum cash payment
within thirty (30) days after the Entitlement Date in an
amount equal to the present value of such enhanced Normal
Retirement Benefits (as defined in the Deferred
Compensation Plan) of the Executive. Such present value
shall be determined on the basis of the average of the
interest rates, as reported in the Wall Street Journal as
of the close of trading for the 20 days that immediately
preceded the Entitlement Date on which the New York Stock
Exchange was open for trading, of the shortest term U.S.
Treasury bond that matures at least 20 years after the
Entitlement Date. In the event enhanced Deferred
Compensation Plan benefits are payable pursuant to this
Section on account of a Triggering Transaction, and the
Executive is entitled to a benefit under Article VII of
the Deferred Compensation Plan on account of a Change in
Control (as defined in the Deferred Compensation Plan),
the Executive shall be entitled to the larger of the
amounts computed pursuant to this Section and the amounts
computed pursuant to the Deferred Compensation Plan
without regard to this Section. Such benefit shall be in
lieu of any other benefit payable pursuant to the
Deferred Compensation Plan.
4.2(g) Medical and Health Benefit Continuation. For
---------------------------------------
a period of ten years after the Entitlement Date and
without cost to the Executive and/or his family, the
Company shall continue medical and health benefits to the
Executive and/or the Executive's family at least equal to
those which were being provided to them prior to the Date
of Termination; provided, however, that if the Executive
-----------------
becomes reemployed with another employer and is eligible
to receive medical or health benefits under another
employer-provided plan, the medical and health benefits
described herein shall be secondary to those provided
under such other plan during such applicable period of
eligibility.
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<PAGE> 14
4.2(h) Other Benefits. To the extent not previously
--------------
paid or provided, the Company shall timely pay or provide
to the Executive and/or the Executive's family any Other
Benefits required to be paid or provided for which the
Executive and/or the Executive's family is eligible to
receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of
the Company as those provided generally to other peer
executives and their families.
4.2(i) Excess Parachute Payment. Anything in this
------------------------
Agreement to the contrary notwithstanding, in the event
that it shall be determined that any payment or
distribution by the Company to or for the benefit of
Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise but determined without regard to any additional
payments required under this Section 4.2(i)) (a
"Payment") would be subject to the excise tax imposed by
Code Section 4999 (or any successor provision) or any
interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes
(and any interest or penalties imposed with respect
thereto) and Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up
Payment on an after-tax basis equal to the Excise Tax
imposed upon the Payment.
The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business
days after the Executive is informed in writing of such
claim by the Internal Revenue Service and the
notification shall apprise the Company of the nature of
the claim and the date on which such claim is required to
be paid. The Executive shall not pay such claim prior to
the expiration of a 30-day period following the date on
which the Executive has given such notification to the
Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is
required). If the Company notifies the Executive in
writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall
cooperate with the Company in so contesting; provided,
---------
however, that the Company shall bear and pay all costs
-------
and expenses (including additional interest and
penalties) incurred in connection with such contest, on
an after-tax basis to the Executive.
4.3 DEATH. If the Executive's employment is terminated
by reason of the Executive's death during the Employment Period
(either prior or subsequent to a Triggering Transaction), this
Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, other than
for (i) payment of Accrued Obligations (as defined in Section
4.1(a)) (which shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination) and (ii) the timely payment
or provision of Other Benefits (as defined in Section 4.1(d)),
including death benefits pursuant to the terms of any plan, policy,
or arrangement of the Company.
4.4 DISABILITY. If the Executive's employment is
terminated by reason of the Executive's Disability during the
Employment Period (either prior or subsequent to a Triggering
Transaction), this Agreement shall terminate without further
obligations to the Executive, other than for (i) payment of
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<PAGE> 15
Accrued Obligations (as defined in Section 4.1(a)) (which shall be
paid to the Executive in a lump sum in cash within thirty (30) days of
the Date of Termination) and (ii) the timely payment or provision of
Other Benefits (as defined in Section 4.1(d)) including Disability
benefits pursuant to the terms of any plan, policy or arrangement
of the Company.
4.5 TERMINATION FOR CAUSE; OTHER THAN GOOD REASON. If
the Executive's employment shall be terminated for Cause during the
Employment Period (either prior or subsequent to a Triggering
Transaction), this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to
the Executive his Accrued Compensation (as defined in this
Section). If the Executive terminates employment with the Company
during the Employment Period, (excluding a termination for Good
Reason), this Agreement shall terminate without further obligations
to the Executive, other than for the payment of Accrued
Compensation (as defined in this Section) and the timely payment or
provision of Other Benefits (as defined in Section 4.1(d)). In such
case, all Accrued Compensation shall be paid to the Executive in a
lump sum in cash within thirty (30) days of the Date of
Termination.
For the purpose of this Section, the term "Accrued
Compensation" means the sum of (i) the Executive's Annual Base
Salary through the Date of Termination to the extent not previously
paid, (ii) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon), and (iii)
any accrued vacation pay in each case to the extent not previously
paid.
4.6 NON-EXCLUSIVITY OF RIGHTS; SUPERSESSION OF CERTAIN
BENEFITS. Except as provided in Sections 4.1(c) and 4.2(g) and in
this Section 4.6, nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company and for which
the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any
contract or agreement with the Company. Amounts which are vested
benefits of which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of, or any contract or
agreement with, the Company at or subsequent to the Date of
Termination, shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly
modified by this Agreement.
4.7 FULL SETTLEMENT. The Company's obligation to make
the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-
off, counterclaim, recoupment, defense or other claim, right or
action which the Company may have against the Executive or others.
In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of
this Agreement and, except as provided in Sections 4.1(c) and
4.2(g), such amounts shall not be reduced whether or not the
Executive obtains other employment. The Company agrees to pay
promptly as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as
a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability
of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any
contest by the Executive regarding the amount of any payment
pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Code
Section 7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If there shall be any
dispute between the Company and the Executive (i) in the event of
any termination of the Executive's employment by the Company,
whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive,
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<PAGE> 16
whether Good Reason existed, then, unless and until there is a final,
nonappealable judgment by a court of competent jurisdiction declaring
that such termination was for Cause or that the determination by the
Executive of the existence of Good Reason was not made in good faith,
the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive's family or other beneficiaries, as the
case may be, that the Company would be required to pay or provide
pursuant to Section 4.1 or 4.2 as though such termination were by the
Company without Cause or by the Executive with Good Reason; provided,
---------
however, that the Company shall not be required to pay any disputed
- -------
amounts pursuant to this Section except upon receipt of an undertaking
by or on behalf of the Executive to repay all such amounts to which
the Executive is ultimately adjudged by such court not to be entitled.
SECTION 5: NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) It is agreed that during the period beginning
on the date the Term of this Agreement expires and ending
one (1) year thereafter, the Executive shall not, without
prior written approval of the Board, become an officer,
employee, agent, partner, or director of any business
enterprise in substantial direct competition (as defined
in Section 5.1(b)) with the Company; provided that, if
the Executive is terminated by the Company without Cause
or if the Executive terminates his employment for Good
Reason, then he will not be subject to the restrictions
of this Section.
5.1(b) For purposes of Section 5.1, a business
enterprise with which the Executive becomes associated as
an officer, employee, agent, partner, or director shall
be considered in substantial direct competition, if such
entity competes with the Company in any business in which
the Company is engaged and is within in the Company's
market area as of the date that the Employment Period
expires.
5.1(c) The above constraint shall not prevent the
Executive from making passive investments, not to exceed
five percent (5%), in any enterprise.
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold
in a fiduciary capacity for the benefit of the Company all secret
or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company and which shall not be or
become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no
event shall an asserted violation of the provisions of this Section
constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal
to the Executive and, without the prior written consent of the
Company, the rights (but not the obligations) shall not be
assignable by
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<PAGE> 17
the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree
to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle the Executive to
terminate the Agreement at his option on or after the Triggering
Transaction Date for Good Reason. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
SECTION 7: MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to time
in the future, provide other incentive programs and bonus
arrangements to the Executive with respect to the occurrence of a
Triggering Event that will be in addition to the benefits required
to be paid in the designated circumstances in connection with the
occurrence of a Triggering Transaction. Such additional incentive
programs and/or bonus arrangements will affect or abrogate the
benefits to be paid under this Agreement only in the manner and to
the extent explicitly agreed to by the Executive in any such
subsequent program or arrangement.
7.2 NOTICE. For purposes of this Agreement, notices and
all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered
or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses
as set forth below; provided that all notices to the Company shall
be directed to the attention of the Chairman of the Board, or to
such other address as one party may have furnished to the other in
writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
Notice to Executive:
-------------------
Lawrence J. Young
15181 Asleview Drive
Chesterfield, MO 63017
Notice to Company:
-----------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
7.3 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
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<PAGE> 18
7.4 WITHHOLDING. The Company may withhold from any
amounts payable under this Agreement such Federal, state or local
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
7.5 WAIVER. The Executive's or the Company's failure to
insist upon strict compliance with any provision hereof or any
other provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 3.4 shall not be
deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
IN WITNESS WHEREOF, the Executive and, the Company,
pursuant to the authorization from its Board, have caused this
Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Lawrence J. Young
-------------------------------------------
Lawrence J. Young
ANGELICA CORPORATION
By /s/ Earle H. Harbison, Jr.
-----------------------------------------
Name: Earle H. Harbison, Jr.
--------------------------------------
Title: Chairman, Compensation Committee BOD
-------------------------------------
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<PAGE> 1
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into this
27th day of November, 1996, by and between Angelica Corporation, a
Missouri corporation ("Company"), and Theodore M. Armstrong, an
individual ("Executive").
RECITALS
The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its
stockholders to reinforce and encourage the continued attention and
dedication of the Executive to the Company as a member of the
Company's management and to assure that the Company will have the
continued dedication of the Executive, notwithstanding the
possibility or occurrence of a Triggering Transaction (as defined
below) with respect to the Company or any of its Operating Lines of
Business (as defined below). The Board desires to provide for the
continued employment of the Executive on terms competitive with
those of other corporations, and the Executive is willing to
rededicate himself and continue to serve the Company.
Additionally, the Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a potential or pending
Triggering Transaction and to encourage the Executive's full
attention and dedication to the Company currently and in the event
of any potential or pending Triggering Transaction, and to provide
the Executive with compensation and benefits arrangements upon any
breach of this Agreement by the Company or upon a termination of
employment either immediately prior to or after a Triggering
Transaction which ensure that the compensation and benefits
expectations of the Executive will be satisfied. Therefore, in
order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
IT IS AGREED AS FOLLOWS:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the
following words and phrases, whether or not capitalized, shall have
the meanings specified below, unless the context plainly requires
a different meaning.
1.1(a) "ACCRUED COMPENSATION" has the meaning set
forth in Section 4.5 of this Agreement.
1.1(b) "ACCRUED OBLIGATIONS" has the meaning set
forth in Section 4.1(a) of this Agreement.
1.1(c) "ANNUAL BASE SALARY" has the meaning set forth
in Section 2.4(a) of this Agreement.
1.1(d) "BOARD" means the Board of Directors of the
Company.
1.1(e) "CAUSE" has the meaning set forth in Section
3.3 of this Agreement.
<PAGE> 2
1.1(f) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual, entity or
group, or a Person (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of
ownership of 30% or more of either (a) the then
outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or
(b) the combined voting power of the then
outstanding voting securities of the Company
entitled to vote generally in the election of
directors (the "Outstanding Company Voting
Securities"); or
(ii) Individuals who, as the date hereof,
constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a
majority of the Board; provided, however, that
-----------------
any individual becoming a director subsequent to
the date hereof whose election, or nomination for
election by the Company's stockholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board
shall be considered as though such individual
were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board,
any such individual whose initial assumption of
office occurs as a result of either an actual or
threatened election contest (as such terms are
used in Rule l4a-11 of Regulation l4A promulgated
under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(iii) Approval by the stockholders of the
Company of a reorganization, merger or
consolidation, in each case, unless, following
such reorganization, merger or consolidation,
(a) more than 50% of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such reorganization,
merger or consolidation and the combined voting
power of the then outstanding voting securities
of such corporation entitled to vote generally in
the election of directors is then beneficially
owned, directly or indirectly, by all or
substantially all of the individuals and entities
who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately
prior to such reorganization, merger or
consolidation in substantially the same
proportions as their ownership, immediately prior
to such reorganization, merger or consolidation,
of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the
case may be, (b) no Person beneficially owns,
directly or indirectly, 30% or more of,
respectively, the then outstanding shares of
common stock of the corporation resulting from
such reorganization, merger or consolidation or
the combined voting power of the then outstanding
voting securities of such corporation, entitled
to vote generally in the election of directors
and (c) at least a majority of the members of the
board of directors of the corporation resulting
from such reorganization, merger or consolidation
were members of the Incumbent Board at the time
of the execution of the initial agreement
providing for such reorganization, merger or
consolidation; or
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<PAGE> 3
(iv) Approval by the stockholders of the Company
of (a) a complete liquidation or dissolution of
the Company or (b) the sale or other disposition
of all or substantially all of the assets of the
Company, other than to a corporation, with
respect to which following such sale or other
disposition, (1) more than 50% of, respectively,
the then outstanding shares of common stock of
such corporation and the combined voting power of
the then outstanding voting securities of such
corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially
all of the individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to
such sale or other disposition in substantially
the same proportion as their ownership,
immediately prior to such sale or other
disposition, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities,
as the case may be, (2) no Person beneficially
owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of
common stock of such corporation and the combined
voting power of the then outstanding voting
securities of such corporation entitled to vote
generally in the election of directors and (3) at
least a majority of the members of the board of
directors of such corporation were members of the
Incumbent Board at the time of the execution of
the initial agreement or action of the Board
providing for such sale or other disposition of
assets of the Company.
1.1(g) "COMPANY" has the meaning set forth in the
first paragraph of this Agreement and, with regard to
successors, in Section 6.2 of this Agreement.
1.1(h) "CODE" shall mean the Internal Revenue Code of
1986, as amended.
1.1(i) "CURRENT TARGET BONUS" has the meaning set
forth in Section 4.1(a) of this Agreement.
1.1(j) "DATE OF TERMINATION" has the meaning set
forth in Section 3.6 of this Agreement.
1.1(k) "DISABILITY" has the meaning set forth in
Section 3.2 of this Agreement.
1.1(l) "DISABILITY EFFECTIVE DATE" has the meaning
set forth in Section 3.2 of this Agreement.
1.1(m) "DISPOSITION OF A MAJOR PART" means:
(i) when used with reference to the stock of an
Operating Line of Business that is or becomes a
separate corporation, limited liability
corporation, partnership or other business
entity, the sale, exchange, transfer,
distribution or other disposition of the
ownership, either beneficially or of record or
both, by the Company of more than 50% of either
(a) the then outstanding shares of common stock
(or the equivalent equity interests) of such
Operating Line of Business, or (b) the combined
voting power of the then outstanding voting
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<PAGE> 4
securities of such Operating Line of Business
entitled to vote generally in the election of the
Board or the equivalent governing body of the
Operating Line of Business;
(ii) when used with reference to the merger or
consolidation of an Operating Line of Business
that is or becomes a separate corporation,
limited liability corporation, partnership or
other business entity, any such transaction that
results in the Company owning, either
beneficially or of record or both, less that 50%
of either (a) the then outstanding shares of
common stock (or the equivalent equity interests)
of such Operating Line of Business, or (b) the
combined voting power of the then outstanding
voting securities of such Operating Line of
Business entitled to vote generally in the
election of the Board or the equivalent governing
body of the Operating Line of Business; or
(iii) when used with reference to the assets of
an Operating Line of Business, the sale,
exchange, transfer, liquidation, distribution or
other disposition of assets of such Operating
Line of Business (a) having a fair market value
(as determined by the Incumbent Board)
aggregating more than 50% of the aggregate fair
market value of all of the assets of such
Operating Line of Business as of the Triggering
Transaction Date, (b) accounting for more than
50% of the aggregate book value (net of
depreciation and amortization) of all of the
assets of such Operating Line of Business, as
would be shown on a balance sheet for such
Operating Line of Business, prepared in
accordance with generally accepted accounting
principles then in effect, as of the Triggering
Transaction Date; or (c) accounting for more than
50% of the net income of such Operating Line of
Business, as would be shown on an income
statement, prepared in accordance with generally
accepted accounting principles then in effect,
for the 12 months ending on the last day of the
month immediately preceding the month in which
the Triggering Transaction Date occurs.
1.1(n) "EFFECTIVE DATE" means the date of this
Agreement.
1.1(o) "EMPLOYMENT PERIOD" means the period beginning
on the Effective Date and ending on the later of (i)
December 31, 1999, or (ii) December 31 of any
succeeding fiscal year during which notice is given by
either party (as described in Section 1.1(dd) of this
Agreement) of such party's intent not to renew this
Agreement.
1.1(p) "EXCHANGE ACT" means the Securities Exchange
Act of 1934, as amended.
1.1(q) "EXCISE TAX" has the meaning set forth in
Section 4.2(e) of this Agreement.
1.1(r) "GOOD REASON" has the meaning set forth in
Section 3.4 of this Agreement.
1.1(s) "GROSS-UP PAYMENT" has the meaning set forth
in Section 4.2(i) of this Agreement.
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<PAGE> 5
1.1(t) "INCENTIVE BONUS" has the meaning set forth in
Section 2.4(b) of this Agreement.
1.1(u) "INCUMBENT BOARD" has the meaning set forth in
Section 1.1(f)(ii) of this Agreement.
1.1(v) "NOTICE OF TERMINATION" has the meaning set
forth in Section 3.5 of this Agreement.
1.1(w) "OPERATING LINES OF BUSINESS" means the
following lines of business of the Company, whether
operated as a division or as a separate subsidiary: (i)
textile rental and laundry services, which provides
textiles and laundry services, principally to health
care institutions, and, to a more limited extent, to
hotels, casinos, motels and restaurants in or near
major metropolitan areas of the United States; (ii)
uniform and business apparel manufacturing and
marketing, which manufactures and sells uniforms and
business apparel to a wide variety of institutions and
businesses in the United States, Canada and the United
Kingdom; and (iii) retail specialty stores, which
operates a nationwide chain of specialty retail stores
primarily for a clientele of nurses and other health
care professionals.
1.1(x) "OTHER BENEFITS" has the meaning set forth in
Section 4.1(d) of this Agreement.
1.1(y) "OUTSTANDING COMPANY COMMON STOCK" has the
meaning set forth in Section 1.1(f)(i) of this
Agreement.
1.1(z) "OUTSTANDING COMPANY VOTING SECURITIES" has
the meaning set forth in Section 1.1(f)(i) of this
Agreement.
1.1(aa) "PAYMENT" has the meaning set forth in Section
4.2(i) of this Agreement.
1.1(bb) "PERSON" means any "person" within the meaning
of Sections 13(d) and 14(d) of the Exchange Act.
1.1(cc) "SUPPLEMENTAL PLAN" has the meaning set forth
in Section 4.2(e) of this Agreement.
1.1(dd) "TERM" means the period that begins on the
Effective Date and ends on the earlier of: (i) the Date
of Termination as defined in Section 3.6 of this
Agreement, or (ii) the close of business on the later
of December 31, 1999 or December 31 of any renewal term
as set forth in Section 2.1 of this Agreement.
1.1(ee) "TRIGGERING TRANSACTION" means (i) a Change in
Control of the Company or (ii) a Disposition of a Major
Part of two or more of the Company's Operating Lines of
Business.
1.1(ff) "TRIGGERING TRANSACTION DATE" shall mean the
date of the Triggering Transaction.
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<PAGE> 6
1.2 GENDER AND NUMBER. When appropriate, pronouns in
this Agreement used in the masculine gender include the feminine
gender, words in the singular include the plural, and words in the
plural include the singular.
1.3 HEADINGS. All headings in this Agreement are
included solely for ease of reference and do not bear on the
interpretation of the text. Accordingly, as used in this
Agreement, the terms "Article" and "Section" mean the text that
accompanies the specified Article or Section of the Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Missouri,
without reference to its conflict of law principles.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT. The Executive shall remain in
the employ of the Company throughout the Term of this Agreement in
accordance with the terms and provisions of this Agreement. This
Agreement will automatically renew for annual one-year periods
unless either party gives the other written notice, by September
30, 1999, or September 30 of any succeeding year, of such party's
intent not to renew this Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Term of this Agreement, the
Executive shall serve as Senior Vice President - Finance
and Administration and Chief Financial Officer subject to
the reasonable directions of the Board. The Executive
shall have such authority and shall perform such duties as
are substantially similar to the authority and duties
assigned to him on the Effective Date, subject to the
control exercised by the Board from time to time.
2.2(b) Throughout the Term of this Agreement (but
excluding any periods of vacation and sick leave to which
the Executive is entitled), the Executive shall devote
reasonable attention and time during normal business hours
to the business and affairs of the Company and shall use
his reasonable best efforts to perform faithfully and
efficiently such responsibilities as are assigned to him
under or in accordance with this Agreement; provided that,
it shall not be a violation of this paragraph for the
Executive to (i) serve on corporate, civic or charitable
boards or committees, (ii) deliver lectures or fulfill
speaking engagements, or (iii) manage personal
investments, so long as such activities do not
significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company
in accordance with this Agreement or violate the Company's
conflict of interest policy as in effect immediately prior
to the Effective Date.
2.3 SITUS OF EMPLOYMENT. Throughout the Term of this
Agreement, the Executive's services shall be performed at the
location where the Executive was employed immediately prior to the
Effective Date, or any office of the Company which is located in
the greater St. Louis area.
2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. For the first calendar year
within the Term of this Agreement, the Executive shall
receive an annual base salary ("Annual Base Salary") of
one hundred and sixty-four thousand dollars ($164,000),
which shall be paid in equal or
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<PAGE> 7
substantially equal semi-monthly installments. During
the Term of this Agreement, the Annual Base Salary
payable to the Executive shall be reviewed at least
annually and shall be increased at the discretion of the
Board or the Compensation Committee of the Board but
shall not be reduced.
2.4(b) INCENTIVE BONUSES. In addition to Annual Base
Salary, the Executive shall be awarded the opportunity to
earn an incentive bonus on an annual basis ("Incentive
Bonus") under any incentive compensation plan which are
generally available to other peer executives of the
Company. During the Term of this Agreement, the annual
target Incentive Bonus which the Executive will have the
opportunity to earn shall be reviewed at least annually
and be increased at the discretion of the Board or the
Compensation Committee of the Board, but in no case shall
such target annual Incentive Bonus which the Executive
will have the opportunity to earn be reduced below
Seventy-Eight Thousand Dollars ($78,000) and, further, in
no event shall the Executive receive less than 50% of such
annual target Incentive Bonus.
2.4(c) INCENTIVE, SAVINGS AND RETIREMENT PLANS.
Throughout the Term of this Agreement, the Executive shall
be entitled to participate in all incentive, savings and
retirement plans generally available to other peer
executives of the Company.
2.4(d) WELFARE BENEFIT PLANS. Throughout the Term of
this Agreement (and thereafter, subject to Sections 4.1(c)
and 4.2(g) hereof), the Executive and/or the Executive's
family, as the case may be, shall be eligible for
participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs
provided by the Company (including, without limitation,
medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death
and travel accident insurance plans and programs) to the
extent generally available to other peer executives of the
Company.
2.4(e) EXPENSES. Throughout the Term of this Agreement,
the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies, practices and
procedures generally applicable to other peer executives
of the Company.
2.4(f) FRINGE BENEFITS. Throughout the Term of this
Agreement, the Executive shall be entitled to such fringe
benefits as generally are provided to other peer
executives of the Company.
2.4(g) OFFICE AND SUPPORT STAFF. Throughout the Term of
this Agreement, the Executive shall be entitled to an
office or offices of a size and with furnishings and other
appointments, and to personal secretarial and other
assistance, at least equal to those generally provided to
other peer executives of the Company.
2.4(h) VACATION. Throughout the Term of this Agreement,
the Executive shall be entitled to paid vacation in
accordance with the plans, policies, programs and
practices generally provided with respect to other peer
executives of the Company.
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<PAGE> 8
SECTION 3: TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment
Period.
3.2 DISABILITY. If the Company determines in good faith
that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability set
forth below), the Company may give to the Executive written notice
in accordance with Section 7.2 of its intention to terminate the
Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the thirtieth (30th)
day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the thirty (30) days after
such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean that the Executive has been
unable to perform the services required of the Executive hereunder
on a full-time basis for a period of one hundred eighty (180)
consecutive business days by reason of a physical and/or mental
condition. "Disability" shall be deemed to exist when certified by
a physician selected by the Company and acceptable to the Executive
or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Executive will
submit to such medical or psychiatric examinations and tests as
such physician deems necessary to make any such Disability
determination.
3.3 TERMINATION FOR CAUSE. The Company may terminate
the Executive's employment during the Employment Period for "Cause,"
which shall mean termination based upon: (i) the Executive's
willful and continued failure to substantially perform his duties
with the Company (other than as a result of incapacity due to
physical or mental condition), after a written demand for
substantial performance is delivered to the Executive by the
Company, which specifically identifies the manner in which the
Executive has not substantially performed his duties, (ii) the
Executive's commission of an act constituting a criminal offense
involving moral turpitude, dishonesty, or breach of trust, or (iii)
the Executive's material breach of any provision of this Agreement.
For purposes of this Section, no act, or failure to act on the
Executive's part shall be considered "willful" unless done, or
omitted to be done, without good faith and without reasonable
belief that the act or omission was in the best interest of the
Company. Notwithstanding the foregoing, the Executive shall not be
deemed to have been terminated for Cause unless and until (i) he
receives a Notice of Termination from the Company, (ii) he is given
the opportunity, with counsel to be heard before the Board, and
(iii) the Board finds, in its good faith opinion, the Executive was
guilty of the conduct set forth in the Notice of Termination.
3.4 GOOD REASON. The Executive may terminate his
employment with the Company for "Good Reason," which shall mean:
3.4(a) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 2.2(a) or any other action by the
Company which results in a material diminution in such
position, authority, duties or responsibilities, excluding
for this purpose any action not taken in bad faith and
which is remedied by the Company promptly after receipt of
notice thereof given by the Executive;
3.4(b) (i) the failure by the Company to continue in
effect any benefit or compensation plan, stock ownership
plan, life insurance plan, health and accident plan or
disability plan to which the Executive is entitled as
specified in Section 2.4, (ii) the taking of any action
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<PAGE> 9
by the Company which would adversely affect the Executive's
participation in, or materially reduce the Executive's
benefits under, any plans described in Section 2.4, or
deprive the Executive of any material fringe benefit
enjoyed by the Executive as described in Section 2.4(f),
or (iii) the failure by the Company to provide the
Executive with paid vacation to which the Executive is
entitled as described in Section 2.4(h).
3.4(c) the Company's requiring the Executive to be based
at any office or location other than that described in
Section 2.3;
3.4(d) a material breach by the Company of any provision
of this Agreement;
3.4(e) any purported termination by the Company of the
Executive's employment otherwise than as expressly
permitted by this Agreement;
3.4(f) within a period ending at the close of business
on the date two (2) years after the Triggering Transaction
Date of any Change in Control, if the Company has failed
to comply with and satisfy Section 6.2 on or after such
Triggering Transaction Date; or
For purposes of this Section, any good faith determination
of "Good Reason" made by the Executive shall be
conclusive.
3.5 NOTICE OF TERMINATION. Any termination by the
Company for Cause or Disability, or by the Executive for Good
Reason, shall be communicated by Notice of Termination to the other
party, given in accordance with Section 7.2. For purposes of this
Agreement, a "Notice of Termination" means a written notice which
(i) indicates the specific termination provision in this Agreement
relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the Date of Termination (as
defined in Section 3.6 hereof) is other than the date of receipt of
such notice, specifies the termination date (which date shall be
not more than fifteen (15) days after the giving of such notice).
The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason or Cause shall not waive any right of the
Executive or the Company hereunder or preclude the Executive or the
Company from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
3.6 DATE OF TERMINATION. "Date of Termination" means
(i) if the Executive's employment is terminated by the Company for
Cause, or by the Executive for Good Reason, the Date of Termination
shall be the date of receipt of the Notice of Termination or any
later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be,
or (iii) if the Executive's employment is terminated by the Company
other than for Cause, death, or Disability, the Date of Termination
shall be the date of receipt of the Notice of Termination; provided
that if within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the
parties, or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected).
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<PAGE> 10
SECTION 4: CERTAIN BENEFITS UPON TERMINATION.
4.1 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON NOT IN
CONNECTION WITH A TRIGGERING TRANSACTION. If, prior to a
Triggering Transaction during the Employment Period (except in the
event that one of the following terminations of employment occurs
within the six-month period prior to the earlier of (a) a
Triggering Transaction or (b) the execution of a definitive
agreement or contract that eventually results in a Triggering
Transaction, which shall result in the payment of severance
benefits set forth in Section 4.2 of this Agreement): (i) the
Company shall terminate the Executive's employment without Cause,
or (ii) the Executive shall terminate employment with the Company
for Good Reason, the Executive shall be entitled to the payment of
the benefits provided below as of the Date of Termination:
4.1(a) Accrued Obligations. Within thirty (30) days
-------------------
after the Date of Termination, the Company shall pay to
the Executive the sum of (1) the Executive's Annual Base
Salary through the Date of Termination to the extent not
previously paid, (2) the accrued benefit payable to the
Executive under any deferred compensation plan, program or
arrangement in which the Executive is a participant
subject to the computation of benefits provisions of such
plan, program or arrangement, and (3) any accrued vacation
pay; in each case to the extent not previously paid (the
"Accrued Obligations").
In addition, on the date that Incentive Bonuses are
paid to other peer executives for the year in which the
Executive's employment is terminated, the Executive will
be paid an amount equal to the product of the Current
Target Bonus multiplied by a fraction, the numerator of
which is the number of days during the fiscal year for
which the Incentive Bonus is paid prior to the Date of
Termination and denominator of which is 365. For purposes
of this Agreement, the term "Current Target Bonus" means
the Incentive Bonus that would have been paid to the
Executive for the fiscal year in which the termination of
employment occurred, if the Executive's employment had not
been so terminated and the Executive had earned 100% of
the Incentive Bonus that he could have earned for such
year.
4.1(b) Annual Base Salary Continuation. For the
-------------------------------
remainder of the Employment Period, the Company shall pay
to the Executive, the Executive's then-current Annual Base
Salary as would have been paid to the Executive had the
Executive remained in the Company's employ throughout the
Employment Period; provided that in all cases the
Executive shall receive, at minimum, the then-current
Annual Base Salary for a period beginning on the Date of
Termination and ending two years thereafter. The Company
at any time may elect to pay the balance of such payments
then remaining in a lump sum, in which case the total of
such payments shall be discounted to present value on the
basis of the applicable Federal short-term monthly rate as
determined according to Code Section 1274(d) for the month
in which the Executive's Date of Termination occurred.
4.1(c) Medical and Health Benefit Continuation. For the
---------------------------------------
remainder of the Employment Period (but in no case less
than one (1) year after the Date of Termination), or such
longer period as any plan, program, practice or policy may
provide, the Company shall continue medical and health
benefits to the Executive and/or the Executive's family at
least equal to those which would have been provided to
them in accordance with the plans, programs, practices and
policies described in Section 2.4(d) if the Executive's
employment had not been terminated, in accordance with the
plans, practices, programs or policies of the
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<PAGE> 11
Company as those provided generally to other peer
executives and their families; provided, however, that if
-----------------
the Executive becomes reemployed with another employer
and is eligible to receive medical or health benefits
under another employer-provided plan, the medical and
health benefits described herein shall be secondary to
those provided under such other plan during such
applicable period of eligibility.
4.1(d) Other Benefits. To the extent not previously
--------------
paid or provided, the Company shall timely pay or provide
to the Executive and/or the Executive's family any other
amounts or benefits required to be paid or provided for
which the Executive and/or the Executive's family is
eligible to receive pursuant to this Agreement and under
any plan, program, policy or practice or contract or
agreement of the Company as those provided generally to
other peer executives and their families ("Other
Benefits").
4.2 BENEFITS UPON TERMINATION IN CONNECTION WITH A
TRIGGERING TRANSACTION. If (a) a Triggering Transaction occurs
during the Employment Period and within three years after the
Triggering Transaction Date (i) the Company shall terminate the
Executive's employment without Cause, or (ii) the Executive shall
terminate employment with the Company for Good Reason, or,
alternatively, (b) if one of the above-described terminations of
employment occurs within the six-month period prior to the earlier
of (i) a Triggering Transaction or (ii) the execution of a
definitive agreement or contract that eventually results in a
Triggering Transaction, then the Executive shall become entitled to
the payment of the benefits as provided below as of either (y) the
Date of Termination, in the case where the sequence of the
requisite events is as set forth in subsection (a) above or (z) the
Triggering Transaction Date, in the case where the sequence of the
requisite events occurred as set forth in subsection (b) above (the
relevant date for purposes of entitlement to the benefits as set
forth in this Section 4.2 is hereinafter referred to as the
"Entitlement Date"):
4.2(a) Accrued Obligations. Within thirty (30) days
-------------------
after the Entitlement Date, the Company shall pay to the
Executive the Accrued Obligations.
In addition, on the date that Incentive Bonuses are
paid to other peer executives for the year in which the
Executive's employment is terminated, the Executive will
be paid an amount equal to the product of the Current
Target Bonus multiplied by a fraction, the numerator of
which is the number of days during the fiscal year for
which the Incentive Bonus is paid prior to the Date of
Termination and denominator of which is 365.
4.2(b) Severance Amount. Within thirty (30) days after
----------------
the Entitlement Date, the Company shall pay to the
Executive as severance pay in a lump sum, in cash, an
amount equal to 2.99 times an amount equal to his then-
current Annual Base Salary and Current Target Bonus. In
the event such severance amount is payable pursuant to
this Section on account of a Triggering Transaction, and
the Executive is entitled to a benefit under Article IV of
the Angelica Corporation Management Retention and
Incentive Plan (the "Management Retention Plan") on
account of a Change in Control (as defined in the
Management Retention Plan), the Executive shall be
entitled to the larger of the amounts computed pursuant to
this Section and the amounts computed pursuant to the
Management Retention Plan without regard to this Section.
Such benefit shall be in lieu of any other benefit payable
pursuant to the Management Retention Plan.
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<PAGE> 12
4.2(c) Stock Options. To the extent not otherwise
-------------
provided for under the terms of the Company's stock option
plans or the Executive's stock option agreements, all
stock options held by the Executive that have not expired
in accordance with their respective terms shall vest and
become fully exercisable as of the Entitlement Date.
4.2(d) Stock Bonus and Incentive Plan Shares. To the
-------------------------------------
extent not otherwise provided for under the terms of the
Company's Stock Bonus and Incentive Plan, all "Matching
Shares" (as defined in such plan) held by or for the
benefit of the Executive that are unvested and restricted
at the Date of Termination shall vest and become
unrestricted as of the Entitlement Date and all "Elected
Shares" (as defined in such plan) held by or for the
benefit of the Executive that are restricted at the Date
of Termination shall become unrestricted as of the
Entitlement Date.
4.2(e) Enhanced Supplemental Retirement Plan Benefits.
----------------------------------------------
The benefit payable to the Executive under the Angelica
Corporation Supplemental Plan (as originally effective
April 1, 1980 and as amended from time to time, including
a restatement as of January 23, 1990) (the "Supplemental
Plan") shall be determined taking into account the
following modifications:
(i) The amount payable to the Executive pursuant to
Section 4 of the Supplemental Plan shall be
determined on the basis of the service with the
Company the Executive would have completed if he
had continued to be employed by the Company until
he attained age 65; provided such additional
imputed service shall not exceed ten years.
(ii) The Executive may begin to receive payments at
any time after he has reached age 55 without any
discount because the payments commence before the
Executive is age 65, regardless of the provisions
of Section 6 of the Supplemental Plan.
(iii) In addition to the benefit payable to the
Executive as determined above, if the Executive
has not attained age 65 as of his Entitlement
Date, he shall be entitled to receive a monthly
benefit equal to the amount of old-age insurance
benefit to which he would be entitled at age 65
under the Social Security Act, based upon the
assumption that he will continue to receive until
reaching age 65 compensation that would be
treated as wages for purposes of the Social
Security Act at the same rate as he received such
compensation at the time of retirement or
severance, which benefit shall commence on the
Executive's Entitlement Date and shall end when
the Executive attains the age of 65 years.
The Executive shall be entitled to receive his entire
benefit, including the enhanced benefits provided by this
Agreement, in a single lump sum cash payment within thirty
(30) days after the Entitlement Date, in which case the
total of such payments shall be discounted to present
value on the basis of the average of the interest rates,
as reported in the Wall Street Journal as of the close of
trading for the 20 days that immediately preceded the
Entitlement Date on which the New York Stock Exchange was
open for trading, of the shortest term U.S. Treasury bond
that matures at least 20 years after the Entitlement Date.
In the event enhanced Supplemental Plan benefits are
payable pursuant to this Section on account of a
Triggering Transaction, and the Executive is entitled to
a benefit under Section 10 of the
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<PAGE> 13
Supplemental Plan on account of a Change in Control (as
defined in the Supplemental Plan), the Executive shall be
entitled to the larger of the amounts computed pursuant
to this Section and the amounts computed pursuant to the
Supplemental Plan without regard to this Section. Such
benefit shall be in lieu of any other benefit payable
pursuant to the Supplemental Plan.
4.2(f) Enhanced Deferred Compensation Plan Benefits. For
--------------------------------------------
purposes of determining the amount payable to Executive
pursuant to the Angelica Corporation Deferred Compensation
Option Plan for Selected Management Employees (the
"Deferred Compensation Plan"), the attained age of the
Executive and years of service with the Company shall be
determined as if the Executive were ten years older than
his actual age (but not older than age 65) and had
continued to be employed by the Company until age 65 (but
not more than ten years of imputed service). The
Executive shall be entitled to receive such enhanced
benefit in a single lump sum cash payment within thirty
(30) days after the Entitlement Date in an amount equal to
the present value of such enhanced Normal Retirement
Benefits (as defined in the Deferred Compensation Plan) of
the Executive. Such present value shall be determined on
the basis of the average of the interest rates, as
reported in the Wall Street Journal as of the close of
trading for the 20 days that immediately preceded the
Entitlement Date on which the New York Stock Exchange was
open for trading, of the shortest term U.S. Treasury bond
that matures at least 20 years after the Entitlement Date.
In the event enhanced Deferred Compensation Plan benefits
are payable pursuant to this Section on account of a
Triggering Transaction, and the Executive is entitled to
a benefit under Article VII of the Deferred Compensation
Plan on account of a Change in Control (as defined in the
Deferred Compensation Plan), the Executive shall be
entitled to the larger of the amounts computed pursuant to
this Section and the amounts computed pursuant to the
Deferred Compensation Plan without regard to this Section.
Such benefit shall be in lieu of any other benefit payable
pursuant to the Deferred Compensation Plan.
4.2(g) Medical and Health Benefit Continuation. For a
---------------------------------------
period of ten years after the Entitlement Date and without
cost to the Executive and/or his family, the Company shall
continue medical and health benefits to the Executive
and/or the Executive's family at least equal to those
which were being provided to them prior to the Date of
Termination; provided, however, that if the Executive
-----------------
becomes reemployed with another employer and is eligible
to receive medical or health benefits under another
employer-provided plan, the medical and health benefits
described herein shall be secondary to those provided
under such other plan during such applicable period of
eligibility.
4.2(h) Other Benefits. To the extent not previously
--------------
paid or provided, the Company shall timely pay or provide
to the Executive and/or the Executive's family any Other
Benefits required to be paid or provided for which the
Executive and/or the Executive's family is eligible to
receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of
the Company as those provided generally to other peer
executives and their families.
4.2(i) Excess Parachute Payment. Anything in this
------------------------
Agreement to the contrary notwithstanding, in the event
that it shall be determined that any payment or
distribution by the Company to or for the benefit of
Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise but determined without regard to any additional
payments required under this Section 4.2(i)) (a "Payment")
would
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<PAGE> 14
be subject to the excise tax imposed by Code Section
4999 (or any successor provision) or any interest or
penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall
be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest or
penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains
an amount of the Gross-Up Payment on an after-tax basis
equal to the Excise Tax imposed upon the Payment.
The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the
Executive is informed in writing of such claim by the
Internal Revenue Service and the notification shall
apprise the Company of the nature of the claim and the
date on which such claim is required to be paid. The
Executive shall not pay such claim prior to the expiration
of a 30-day period following the date on which the
Executive has given such notification to the Company (or
such shorter period ending on the date that any payment of
taxes with respect to such claim is required). If the
Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such
claim, the Executive shall cooperate with the Company in
so contesting; provided, however, that the Company shall
-----------------
bear and pay all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest, on an after-tax basis to the Executive.
4.3 DEATH. If the Executive's employment is terminated
by reason of the Executive's death during the Employment Period
(either prior or subsequent to a Triggering Transaction), this
Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, other than
for (i) payment of Accrued Obligations (as defined in Section
4.1(a)) (which shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination) and (ii) the timely payment
or provision of Other Benefits (as defined in Section 4.1(d)),
including death benefits pursuant to the terms of any plan, policy,
or arrangement of the Company.
4.4 DISABILITY. If the Executive's employment is
terminated by reason of the Executive's Disability during the
Employment Period (either prior or subsequent to a Triggering
Transaction), this Agreement shall terminate without further
obligations to the Executive, other than for (i) payment of Accrued
Obligations (as defined in Section 4.1(a)) (which shall be paid to
the Executive in a lump sum in cash within thirty (30) days of the
Date of Termination) and (ii) the timely payment or provision of
Other Benefits (as defined in Section 4.1(d)) including Disability
benefits pursuant to the terms of any plan, policy or arrangement
of the Company.
4.5 TERMINATION FOR CAUSE; OTHER THAN GOOD REASON. If
the Executive's employment shall be terminated for Cause during the
Employment Period (either prior or subsequent to a Triggering
Transaction), this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to
the Executive his Accrued Compensation (as defined in this
Section). If the Executive terminates employment with the Company
during the Employment Period, (excluding a termination for Good
Reason), this Agreement shall terminate without further obligations
to the Executive, other than for the payment of Accrued
Compensation (as defined in this Section) and the
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<PAGE> 15
timely payment or provision of Other Benefits (as defined in Section
4.1(d)). In such case, all Accrued Compensation shall be paid to the
Executive in a lump sum in cash within thirty (30) days of the Date of
Termination.
For the purpose of this Section, the term "Accrued
Compensation" means the sum of (i) the Executive's Annual Base
Salary through the Date of Termination to the extent not previously
paid, (ii) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon), and (iii)
any accrued vacation pay in each case to the extent not previously
paid.
4.6 NON-EXCLUSIVITY OF RIGHTS; SUPERSESSION OF CERTAIN
BENEFITS. Except as provided in Sections 4.1(c) and 4.2(g) and in
this Section 4.6, nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company and for which
the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any
contract or agreement with the Company. Amounts which are vested
benefits of which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of, or any contract or
agreement with, the Company at or subsequent to the Date of
Termination, shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly
modified by this Agreement.
4.7 FULL SETTLEMENT. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and,
except as provided in Sections 4.1(c) and 4.2(g), such amounts
shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay promptly as incurred, to the
full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive
or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive
regarding the amount of any payment pursuant to this Agreement),
plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Code Section 7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If there shall be any
dispute between the Company and the Executive (i) in the event of
any termination of the Executive's employment by the Company,
whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason
existed, then, unless and until there is a final, nonappealable
judgment by a court of competent jurisdiction declaring that such
termination was for Cause or that the determination by the
Executive of the existence of Good Reason was not made in good
faith, the Company shall pay all amounts, and provide all benefits,
to the Executive and/or the Executive's family or other
beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to Section 4.1 or 4.2 as though
such termination were by the Company without Cause or by the
Executive with Good Reason; provided, however, that the Company
-----------------
shall not be required to pay any disputed amounts pursuant to this
Section except upon receipt of an undertaking by or on behalf of
the Executive to repay all such amounts to which the Executive is
ultimately adjudged by such court not to be entitled.
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<PAGE> 16
SECTION 5: NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) It is agreed that during the period beginning on
the date the Term of this Agreement expires and ending one
(1) year thereafter, the Executive shall not, without
prior written approval of the Board, become an officer,
employee, agent, partner, or director of any business
enterprise in substantial direct competition (as defined
in Section 5.1(b)) with the Company; provided that, if the
Executive is terminated by the Company without Cause or if
the Executive terminates his employment for Good Reason,
then he will not be subject to the restrictions of this
Section.
5.1(b) For purposes of Section 5.1, a business
enterprise with which the Executive becomes associated as
an officer, employee, agent, partner, or director shall be
considered in substantial direct competition, if such
entity competes with the Company in any business in which
the Company is engaged and is within in the Company's
market area as of the date that the Employment Period
expires.
5.1(c) The above constraint shall not prevent the
Executive from making passive investments, not to exceed
five percent (5%), in any enterprise.
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold
in a fiduciary capacity for the benefit of the Company all secret
or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company and which shall not be or
become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no
event shall an asserted violation of the provisions of this Section
constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal
to the Executive and, without the prior written consent of the
Company, the rights (but not the obligations) shall not be
assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree
to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle the Executive to
terminate the Agreement at his option on or after the Triggering
Transaction Date for Good Reason. As used in this Agreement,
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<PAGE> 17
"Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
SECTION 7: MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to
time in the future, provide other incentive programs and bonus
arrangements to the Executive with respect to the occurrence of a
Triggering Event that will be in addition to the benefits required
to be paid in the designated circumstances in connection with the
occurrence of a Triggering Transaction. Such additional incentive
programs and/or bonus arrangements will affect or abrogate the
benefits to be paid under this Agreement only in the manner and to
the extent explicitly agreed to by the Executive in any such
subsequent program or arrangement.
7.2 NOTICE. For purposes of this Agreement, notices and
all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered
or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses
as set forth below; provided that all notices to the Company shall
be directed to the attention of the Chairman of the Board, or to
such other address as one party may have furnished to the other in
writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
Notice to Executive:
-------------------
Theodore M. Armstrong
43 Countryside Lane
Frontenac, MO 63131
Notice to Company:
-----------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
7.3 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
7.4 WITHHOLDING. The Company may withhold from any
amounts payable under this Agreement such Federal, state or local
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
7.5 WAIVER. The Executive's or the Company's failure to
insist upon strict compliance with any provision hereof or any
other provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 3.4 shall not be
deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
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<PAGE> 18
IN WITNESS WHEREOF, the Executive and, the Company,
pursuant to the authorization from its Board, have caused this
Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Theodore M. Armstrong
---------------------------------------
Theodore M. Armstrong
ANGELICA CORPORATION
By /s/ L. J. Young
-------------------------------------
Name: L. J. Young
----------------------------------
Title: Chairman and President
---------------------------------
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<PAGE> 1
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into this 27th day of
November, 1996, by and between Angelica Corporation, a Missouri corporation
("Company"), and Jill Witter, an individual ("Executive").
RECITALS
The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its stockholders to
reinforce and encourage the continued attention and dedication of the
Executive to the Company as a member of the Company's management and to
assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility or occurrence of a Triggering Transaction (as
defined below) with respect to the Company or any of its Operating Lines of
Business (as defined below). The Board desires to provide for the continued
employment of the Executive on terms competitive with those of other
corporations, and the Executive is willing to rededicate herself and continue
to serve the Company. Additionally, the Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a potential or pending Triggering
Transaction and to encourage the Executive's full attention and dedication to
the Company currently and in the event of any potential or pending Triggering
Transaction, and to provide the Executive with compensation and benefits
arrangements upon any breach of this Agreement by the Company or upon a
termination of employment either immediately prior to or after a Triggering
Transaction which ensure that the compensation and benefits expectations of
the Executive will be satisfied. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement.
IT IS AGREED AS FOLLOWS:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the following
words and phrases, whether or not capitalized, shall have the meanings
specified below, unless the context plainly requires a different meaning.
1.1(a) "ACCRUED COMPENSATION" has the meaning set forth in
Section 4.5 of this Agreement.
1.1(b) "ACCRUED OBLIGATIONS" has the meaning set forth in
Section 4.1(a) of this Agreement.
1.1(c) "ANNUAL BASE SALARY" has the meaning set forth in
Section 2.4(a) of this Agreement.
1.1(d) "BOARD" means the Board of Directors of the
Company.
1.1(e) "CAUSE" has the meaning set forth in Section 3.3 of
this Agreement.
<PAGE> 2
1.1(f) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual, entity or
group, or a Person (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of
ownership of 30% or more of either (a) the then
outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (b) the
combined voting power of the then outstanding
voting securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Company Voting Securities"); or
(ii) Individuals who, as the date hereof,
constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of
the Board; provided, however, that any individual
-----------------
becoming a director subsequent to the date hereof
whose election, or nomination for election by the
Company's stockholders, was approved by a vote of
at least a majority of the directors then
comprising the Incumbent Board shall be considered
as though such individual were a member of the
Incumbent Board, but excluding, as a member of the
Incumbent Board, any such individual whose initial
assumption of office occurs as a result of either
an actual or threatened election contest (as such
terms are used in Rule l4a-11 of Regulation l4A
promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board;
or
(iii) Approval by the stockholders of the Company
of a reorganization, merger or consolidation, in
each case, unless, following such reorganization,
merger or consolidation, (a) more than 50% of,
respectively, the then outstanding shares of common
stock of the corporation resulting from such
reorganization, merger or consolidation and the
combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all
or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger or
consolidation in substantially the same proportions
as their ownership, immediately prior to such
reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be,
(b) no Person beneficially owns, directly or
indirectly, 30% or more of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such reorganization,
merger or consolidation or the combined voting
power of the then outstanding voting securities of
such corporation, entitled to vote generally in the
election of directors and (c) at least a majority
of the members of the board of directors of the
corporation resulting from such reorganization,
merger or consolidation were members of the
Incumbent Board at the time of the execution of the
initial agreement providing for such
reorganization, merger or consolidation; or
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<PAGE> 3
(iv) Approval by the stockholders of the Company
of (a) a complete liquidation or dissolution of the
Company or (b) the sale or other disposition of all
or substantially all of the assets of the Company,
other than to a corporation, with respect to which
following such sale or other disposition, (1) more
than 50% of, respectively, the then outstanding
shares of common stock of such corporation and the
combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all
or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition
in substantially the same proportion as their
ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as
the case may be, (2) no Person beneficially owns,
directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common
stock of such corporation and the combined voting
power of the then outstanding voting securities of
such corporation entitled to vote generally in the
election of directors and (3) at least a majority
of the members of the board of directors of such
corporation were members of the Incumbent Board at
the time of the execution of the initial agreement
or action of the Board providing for such sale or
other disposition of assets of the Company.
1.1(g) "COMPANY" has the meaning set forth in the first
paragraph of this Agreement and, with regard to successors, in
Section 6.2 of this Agreement.
1.1(h) "CODE" shall mean the Internal Revenue Code of
1986, as amended.
1.1(i) "CURRENT TARGET BONUS" has the meaning set forth in
Section 4.1(a) of this Agreement.
1.1(j) "DATE OF TERMINATION" has the meaning set forth in
Section 3.6 of this Agreement.
1.1(k) "DISABILITY" has the meaning set forth in Section
3.2 of this Agreement.
1.1(l) "DISABILITY EFFECTIVE DATE" has the meaning set
forth in Section 3.2 of this Agreement.
1.1(m) "DISPOSITION OF A MAJOR PART" means:
(i) when used with reference to the stock of an
Operating Line of Business that is or becomes a
separate corporation, limited liability
corporation, partnership or other business entity,
the sale, exchange, transfer, distribution or other
disposition of the ownership, either beneficially
or of record or both, by the Company of more than
50% of either (a) the then outstanding shares of
common stock (or the equivalent equity interests)
of such Operating Line of Business, or (b) the
combined voting power of the then outstanding
voting
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<PAGE> 4
securities of such Operating Line of Business
entitled to vote generally in the election of the
Board or the equivalent governing body of the
Operating Line of Business;
(ii) when used with reference to the merger or
consolidation of an Operating Line of Business that
is or becomes a separate corporation, limited
liability corporation, partnership or other
business entity, any such transaction that results
in the Company owning, either beneficially or of
record or both, less that 50% of either (a) the
then outstanding shares of common stock (or the
equivalent equity interests) of such Operating Line
of Business, or (b) the combined voting power of
the then outstanding voting securities of such
Operating Line of Business entitled to vote
generally in the election of the Board or the
equivalent governing body of the Operating Line of
Business; or
(iii) when used with reference to the assets of an
Operating Line of Business, the sale, exchange,
transfer, liquidation, distribution or other
disposition of assets of such Operating Line of
Business (a) having a fair market value (as
determined by the Incumbent Board) aggregating more
than 50% of the aggregate fair market value of all
of the assets of such Operating Line of Business as
of the Triggering Transaction Date, (b) accounting
for more than 50% of the aggregate book value (net
of depreciation and amortization) of all of the
assets of such Operating Line of Business, as would
be shown on a balance sheet for such Operating Line
of Business, prepared in accordance with generally
accepted accounting principles then in effect, as
of the Triggering Transaction Date; or (c)
accounting for more than 50% of the net income of
such Operating Line of Business, as would be shown
on an income statement, prepared in accordance with
generally accepted accounting principles then in
effect, for the 12 months ending on the last day of
the month immediately preceding the month in which
the Triggering Transaction Date occurs.
1.1(n) "EFFECTIVE DATE" means the date of this Agreement.
1.1(o) "EMPLOYMENT PERIOD" means the period beginning on
the Effective Date and ending on the later of (i) December 31,
1999, or (ii) December 31 of any succeeding fiscal year during
which notice is given by either party (as described in
Section 1.1(dd) of this Agreement) of such party's intent not
to renew this Agreement.
1.1(p) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
1.1(q) "EXCISE TAX" has the meaning set forth in Section
4.2(e) of this Agreement.
1.1(r) "GOOD REASON" has the meaning set forth in Section
3.4 of this Agreement.
1.1(s) "GROSS-UP PAYMENT" has the meaning set forth in
Section 4.2(i) of this Agreement.
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<PAGE> 5
1.1(t) "INCENTIVE BONUS" has the meaning set forth in
Section 2.4(b) of this Agreement.
1.1(u) "INCUMBENT BOARD" has the meaning set forth in
Section 1.1(f)(ii) of this Agreement.
1.1(v) "NOTICE OF TERMINATION" has the meaning set forth in
Section 3.5 of this Agreement.
1.1(w) "OPERATING LINES OF BUSINESS" means the following
lines of business of the Company, whether operated as a
division or as a separate subsidiary: (i) textile rental and
laundry services, which provides textiles and laundry
services, principally to health care institutions, and, to a
more limited extent, to hotels, casinos, motels and
restaurants in or near major metropolitan areas of the United
States; (ii) uniform and business apparel manufacturing and
marketing, which manufactures and sells uniforms and business
apparel to a wide variety of institutions and businesses in
the United States, Canada and the United Kingdom; and (iii)
retail specialty stores, which operates a nationwide chain of
specialty retail stores primarily for a clientele of nurses
and other health care professionals.
1.1(x) "OTHER BENEFITS" has the meaning set forth in
Section 4.1(d) of this Agreement.
1.1(y) "OUTSTANDING COMPANY COMMON STOCK" has the meaning
set forth in Section 1.1(f)(i) of this Agreement.
1.1(z) "OUTSTANDING COMPANY VOTING SECURITIES" has the
meaning set forth in Section 1.1(f)(i) of this Agreement.
1.1(aa) "PAYMENT" has the meaning set forth in Section
4.2(i) of this Agreement.
1.1(bb) "PERSON" means any "person" within the meaning of
Sections 13(d) and 14(d) of the Exchange Act.
1.1(cc) "SUPPLEMENTAL PLAN" has the meaning set forth in
Section 4.2(e) of this Agreement.
1.1(dd) "TERM" means the period that begins on the Effective
Date and ends on the earlier of: (i) the Date of Termination
as defined in Section 3.6 of this Agreement, or (ii) the close
of business on the later of December 31, 1999 or December 31
of any renewal term as set forth in Section 2.1 of this
Agreement.
1.1(ee) "TRIGGERING TRANSACTION" means (i) a Change in
Control of the Company or (ii) a Disposition of a Major Part
of two or more of the Company's Operating Lines of Business.
1.1(ff) "TRIGGERING TRANSACTION DATE" shall mean the date of
the Triggering Transaction.
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<PAGE> 6
1.2 GENDER AND NUMBER. When appropriate, pronouns in this
Agreement used in the masculine gender include the feminine gender, words in
the singular include the plural, and words in the plural include the
singular.
1.3 HEADINGS. All headings in this Agreement are included solely
for ease of reference and do not bear on the interpretation of the text.
Accordingly, as used in this Agreement, the terms "Article" and "Section"
mean the text that accompanies the specified Article or Section of the
Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri, without
reference to its conflict of law principles.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT. The Executive shall remain in the
employ of the Company throughout the Term of this Agreement in accordance
with the terms and provisions of this Agreement. This Agreement will
automatically renew for annual one-year periods unless either party gives the
other written notice, by September 30, 1999, or September 30 of any
succeeding year, of such party's intent not to renew this Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Term of this Agreement, the Executive
shall serve as Vice President, General Counsel and Secretary
subject to the reasonable directions of the Board. The Executive
shall have such authority and shall perform such duties as are
substantially similar to the authority and duties assigned to her
on the Effective Date, subject to the control exercised by the
Board from time to time.
2.2(b) Throughout the Term of this Agreement (but excluding any
periods of vacation and sick leave to which the Executive is
entitled), the Executive shall devote reasonable attention and time
during normal business hours to the business and affairs of the
Company and shall use her reasonable best efforts to perform
faithfully and efficiently such responsibilities as are assigned to
her under or in accordance with this Agreement; provided that, it
shall not be a violation of this paragraph for the Executive to
(i) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures or fulfill speaking engagements, or
(iii) manage personal investments, so long as such activities do
not significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with
this Agreement or violate the Company's conflict of interest policy
as in effect immediately prior to the Effective Date.
2.3 SITUS OF EMPLOYMENT. Throughout the Term of this Agreement,
the Executive's services shall be performed at the location where the
Executive was employed immediately prior to the Effective Date, or any office
of the Company which is located in the greater St. Louis area.
2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. For the first calendar year within
the Term of this Agreement, the Executive shall receive an annual
base salary ("Annual Base Salary") of Ninety thousand dollars
($90,000), which shall be paid in equal or substantially equal
semi-
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<PAGE> 7
monthly installments. During the Term of this Agreement, the
Annual Base Salary payable to the Executive shall be reviewed at
least annually and shall be increased at the discretion of the
Board or the Compensation Committee of the Board but shall not be
reduced.
2.4(b) INCENTIVE BONUSES. In addition to Annual Base Salary,
the Executive shall be awarded the opportunity to earn an incentive
bonus on an annual basis ("Incentive Bonus") under any incentive
compensation plan which are generally available to other peer
executives of the Company. During the Term of this Agreement, the
annual target Incentive Bonus which the Executive will have the
opportunity to earn shall be reviewed at least annually and be
increased at the discretion of the Board or the Compensation
Committee of the Board, but in no case shall such target annual
Incentive Bonus which the Executive will have the opportunity to
earn be reduced below Thirty Thousand Dollars ($30,000) and,
further, in no event shall the Executive receive less than 50% of
such annual target Incentive Bonus.
2.4(c) INCENTIVE, SAVINGS AND RETIREMENT PLANS. Throughout the
Term of this Agreement, the Executive shall be entitled to
participate in all incentive, savings and retirement plans
generally available to other peer executives of the Company.
2.4(d) WELFARE BENEFIT PLANS. Throughout the Term of this
Agreement (and thereafter, subject to Sections 4.1(c) and 4.2(g)
hereof), the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices, policies and
programs provided by the Company (including, without limitation,
medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent generally available to
other peer executives of the Company.
2.4(e) EXPENSES. Throughout the Term of this Agreement, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in accordance with
the policies, practices and procedures generally applicable to
other peer executives of the Company.
2.4(f) FRINGE BENEFITS. Throughout the Term of this Agreement,
the Executive shall be entitled to such fringe benefits as
generally are provided to other peer executives of the Company.
2.4(g) OFFICE AND SUPPORT STAFF. Throughout the Term of this
Agreement, the Executive shall be entitled to an office or offices
of a size and with furnishings and other appointments, and to
personal secretarial and other assistance, at least equal to those
generally provided to other peer executives of the Company.
2.4(h) VACATION. Throughout the Term of this Agreement, the
Executive shall be entitled to paid vacation in accordance with the
plans, policies, programs and practices generally provided with
respect to other peer executives of the Company.
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<PAGE> 8
SECTION 3: TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period.
3.2 DISABILITY. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), the Company may
give to the Executive written notice in accordance with Section 7.2 of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the thirty (30) days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean that the Executive has been unable to perform the
services required of the Executive hereunder on a full-time basis for a
period of one hundred eighty (180) consecutive business days by reason of a
physical and/or mental condition. "Disability" shall be deemed to exist when
certified by a physician selected by the Company and acceptable to the
Executive or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Executive will submit to
such medical or psychiatric examinations and tests as such physician deems
necessary to make any such Disability determination.
3.3 TERMINATION FOR CAUSE. The Company may terminate the
Executive's employment during the Employment Period for "Cause," which shall
mean termination based upon: (i) the Executive's willful and continued
failure to substantially perform her duties with the Company (other than as
a result of incapacity due to physical or mental condition), after a written
demand for substantial performance is delivered to the Executive by the
Company, which specifically identifies the manner in which the Executive has
not substantially performed her duties, (ii) the Executive's commission of an
act constituting a criminal offense involving moral turpitude, dishonesty, or
breach of trust, or (iii) the Executive's material breach of any provision of
this Agreement. For purposes of this Section, no act, or failure to act on
the Executive's part shall be considered "willful" unless done, or omitted to
be done, without good faith and without reasonable belief that the act or
omission was in the best interest of the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for
Cause unless and until (i) he receives a Notice of Termination from the
Company, (ii) he is given the opportunity, with counsel to be heard before
the Board, and (iii) the Board finds, in its good faith opinion, the
Executive was guilty of the conduct set forth in the Notice of Termination.
3.4 GOOD REASON. The Executive may terminate her employment with
the Company for "Good Reason," which shall mean:
3.4(a) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section
2.2(a) or any other action by the Company which results in a
material diminution in such position, authority, duties or
responsibilities, excluding for this purpose any action not taken
in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
3.4(b) (i) the failure by the Company to continue in effect any
benefit or compensation plan, stock ownership plan, life insurance
plan, health and accident plan or disability plan to which the
Executive is entitled as specified in Section 2.4, (ii) the taking
of any action
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<PAGE> 9
by the Company which would adversely affect the Executive's
participation in, or materially reduce the Executive's benefits
under, any plans described in Section 2.4, or deprive the Executive
of any material fringe benefit enjoyed by the Executive as
described in Section 2.4(f), or (iii) the failure by the Company to
provide the Executive with paid vacation to which the Executive is
entitled as described in Section 2.4(h).
3.4(c) the Company's requiring the Executive to be based at any
office or location other than that described in Section 2.3;
3.4(d) a material breach by the Company of any provision of this
Agreement;
3.4(e) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by
this Agreement;
3.4(f) within a period ending at the close of business on the
date two (2) years after the Triggering Transaction Date of any
Change in Control, if the Company has failed to comply with and
satisfy Section 6.2 on or after such Triggering Transaction Date;
or
For purposes of this Section, any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
3.5 NOTICE OF TERMINATION. Any termination by the Company for
Cause or Disability, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party, given in accordance
with Section 7.2. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated,
and (iii) if the Date of Termination (as defined in Section 3.6 hereof) is
other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than fifteen (15) days after the giving of such
notice). The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing
of Good Reason or Cause shall not waive any right of the Executive or the
Company hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the Company's
rights hereunder.
3.6 DATE OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the Date of Termination shall be the date of
receipt of the Notice of Termination or any later date specified therein, as
the case may be, (ii) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be, or
(iii) if the Executive's employment is terminated by the Company other than
for Cause, death, or Disability, the Date of Termination shall be the date of
receipt of the Notice of Termination; provided that if within thirty (30)
days after any Notice of Termination is given, the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date on
which the dispute is finally determined, either by mutual written agreement
of the parties, or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been perfected).
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<PAGE> 10
SECTION 4: CERTAIN BENEFITS UPON TERMINATION.
4.1 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON NOT IN CONNECTION
WITH A TRIGGERING TRANSACTION. If, prior to a Triggering Transaction during
the Employment Period (except in the event that one of the following
terminations of employment occurs within the six-month period prior to the
earlier of (a) a Triggering Transaction or (b) the execution of a definitive
agreement or contract that eventually results in a Triggering Transaction,
which shall result in the payment of severance benefits set forth in Section
4.2 of this Agreement): (i) the Company shall terminate the Executive's
employment without Cause, or (ii) the Executive shall terminate employment
with the Company for Good Reason, the Executive shall be entitled to the
payment of the benefits provided below as of the Date of Termination:
4.1(a) Accrued Obligations. Within thirty (30) days after the
-------------------
Date of Termination, the Company shall pay to the Executive the sum
of (1) the Executive's Annual Base Salary through the Date of
Termination to the extent not previously paid, (2) the accrued
benefit payable to the Executive under any deferred compensation
plan, program or arrangement in which the Executive is a
participant subject to the computation of benefits provisions of
such plan, program or arrangement, and (3) any accrued vacation
pay; in each case to the extent not previously paid (the "Accrued
Obligations").
In addition, on the date that Incentive Bonuses are paid to
other peer executives for the year in which the Executive's
employment is terminated, the Executive will be paid an amount
equal to the product of the Current Target Bonus multiplied by a
fraction, the numerator of which is the number of days during the
fiscal year for which the Incentive Bonus is paid prior to the Date
of Termination and denominator of which is 365. For purposes of
this Agreement, the term "Current Target Bonus" means the Incentive
Bonus that would have been paid to the Executive for the fiscal
year in which the termination of employment occurred, if the
Executive's employment had not been so terminated and the Executive
had earned 100% of the Incentive Bonus that he could have earned
for such year.
4.1(b) Annual Base Salary Continuation. For the remainder of
-------------------------------
the Employment Period, the Company shall pay to the Executive, the
Executive's then-current Annual Base Salary as would have been paid
to the Executive had the Executive remained in the Company's employ
throughout the Employment Period; provided that in all cases the
Executive shall receive, at minimum, the then-current Annual Base
Salary for a period beginning on the Date of Termination and ending
two years thereafter. The Company at any time may elect to pay the
balance of such payments then remaining in a lump sum, in which
case the total of such payments shall be discounted to present
value on the basis of the applicable Federal short-term monthly
rate as determined according to Code Section 1274(d) for the month
in which the Executive's Date of Termination occurred.
4.1(c) Medical and Health Benefit Continuation. For the
---------------------------------------
remainder of the Employment Period (but in no case less than one
(1) year after the Date of Termination), or such longer period as
any plan, program, practice or policy may provide, the Company
shall continue medical and health benefits to the Executive and/or
the Executive's family at least equal to those which would have
been provided to them in accordance with the plans, programs,
practices and policies described in Section 2.4(d) if the
Executive's employment had not been terminated, in accordance with
the plans, practices, programs or policies of the
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<PAGE> 11
Company as those provided generally to other peer executives and
their families; provided, however, that if the Executive becomes
-----------------
reemployed with another employer and is eligible to receive medical
or health benefits under another employer-provided plan, the
medical and health benefits described herein shall be secondary to
those provided under such other plan during such applicable period
of eligibility.
4.1(d) Other Benefits. To the extent not previously paid or
--------------
provided, the Company shall timely pay or provide to the Executive
and/or the Executive's family any other amounts or benefits
required to be paid or provided for which the Executive and/or the
Executive's family is eligible to receive pursuant to this
Agreement and under any plan, program, policy or practice or
contract or agreement of the Company as those provided generally to
other peer executives and their families ("Other Benefits").
4.2 BENEFITS UPON TERMINATION IN CONNECTION WITH A TRIGGERING
TRANSACTION. If (a) a Triggering Transaction occurs during the Employment
Period and within three years after the Triggering Transaction Date (i) the
Company shall terminate the Executive's employment without Cause, or (ii) the
Executive shall terminate employment with the Company for Good Reason, or,
--
alternatively, (b) if one of the above-described terminations of employment
occurs within the six-month period prior to the earlier of (i) a Triggering
Transaction or (ii) the execution of a definitive agreement or contract that
eventually results in a Triggering Transaction, then the Executive shall
become entitled to the payment of the benefits as provided below as of either
(y) the Date of Termination, in the case where the sequence of the requisite
events is as set forth in subsection (a) above or (z) the Triggering
Transaction Date, in the case where the sequence of the requisite events
occurred as set forth in subsection (b) above (the relevant date for purposes
of entitlement to the benefits set forth in this Section 4.2 is hereinafter
referred to as the "Entitlement Date"):
4.2(a) Accrued Obligations. Within thirty (30) days after the
-------------------
Entitlement Date, the Company shall pay to the Executive the
Accrued Obligations.
In addition, on the date that Incentive Bonuses are paid to
other peer executives for the year in which the Executive's
employment is terminated, the Executive will be paid an amount
equal to the product of the Current Target Bonus multiplied by a
fraction, the numerator of which is the number of days during the
fiscal year for which the Incentive Bonus is paid prior to the Date
of Termination and denominator of which is 365.
4.2(b) Severance Amount. Within thirty (30) days after the
----------------
Entitlement Date, the Company shall pay to the Executive as
severance pay in a lump sum, in cash, an amount equal to 2.99 times
an amount equal to her then-current Annual Base Salary and Current
Target Bonus. In the event such severance amount is payable
pursuant to this Section on account of a Triggering Transaction,
and the Executive is entitled to a benefit under Article IV of the
Angelica Corporation Management Retention and Incentive Plan (the
"Management Retention Plan") on account of a Change in Control (as
defined in the Management Retention Plan), the Executive shall be
entitled to the larger of the amounts computed pursuant to this
Section and the amounts computed pursuant to the Management
Retention Plan without regard to this Section. Such benefit shall
be in lieu of any other benefit payable pursuant to the Management
Retention Plan.
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<PAGE> 12
4.2(c) Stock Options. To the extent not otherwise provided for
-------------
under the terms of the Company's stock option plans or the
Executive's stock option agreements, all stock options held by the
Executive that have not expired in accordance with their respective
terms shall vest and become fully exercisable as of the Entitlement
Date.
4.2(d) Stock Bonus and Incentive Plan Shares. To the extent not
-------------------------------------
otherwise provided for under the terms of the Company's Stock Bonus
and Incentive Plan, all "Matching Shares" (as defined in such plan)
held by or for the benefit of the Executive that are unvested and
restricted at the Date of Termination shall vest and become
unrestricted as of the Entitlement Date and all "Elected Shares"
(as defined in such plan) held by or for the benefit of the
Executive that are restricted at the Date of Termination shall
become unrestricted as of the Entitlement Date.
4.2(e) Enhanced Supplemental Retirement Plan Benefits. The
----------------------------------------------
benefit payable to the Executive under the Angelica Corporation
Supplemental Plan (as originally effective April 1, 1980 and as
amended from time to time, including a restatement as of January
23, 1990) (the "Supplemental Plan") shall be determined taking into
account the following modifications:
(i) The amount payable to the Executive pursuant to Section
4 of the Supplemental Plan shall be determined on the
basis of the service with the Company the Executive would
have completed if he had continued to be employed by the
Company until he attained age 65; provided such
additional imputed service shall not exceed ten years.
(ii) The Executive may begin to receive payments at any time
after he has reached age 55 without any discount because
the payments commence before the Executive is age 65,
regardless of the provisions of Section 6 of the
Supplemental Plan.
(iii) In addition to the benefit payable to the Executive
as determined above, if the Executive has not
attained age 65 as of her Entitlement Date, he
shall be entitled to receive a monthly benefit
equal to the amount of old-age insurance benefit to
which he would be entitled at age 65 under the
Social Security Act, based upon the assumption that
he will continue to receive until reaching age 65
compensation that would be treated as wages for
purposes of the Social Security Act at the same
rate as he received such compensation at the time
of retirement or severance, which benefit shall
commence on the Executive's Entitlement Date and
shall end when the Executive attains the age of 65
years.
The Executive shall be entitled to receive her entire benefit,
including the enhanced benefits provided by this Agreement, in a
single lump sum cash payment within thirty (30) days after the
Entitlement Date, in which case the total of such payments shall be
discounted to present value on the basis of the average of the
interest rates, as reported in the Wall Street Journal as of the
close of trading for the 20 days that immediately preceded the
Entitlement Date on which the New York Stock Exchange was open for
trading, of the shortest term U.S. Treasury bond that matures at
least 20 years after the Entitlement Date. In the event enhanced
Supplemental Plan benefits are payable pursuant to this Section on
account of a Triggering Transaction, and the Executive is entitled
to a benefit under Section 10 of the
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<PAGE> 13
Supplemental Plan on account of a Change in Control (as defined in
the Supplemental Plan), the Executive shall be entitled to the
larger of the amounts computed pursuant to this Section and the
amounts computed pursuant to the Supplemental Plan without regard
to this Section. Such benefit shall be in lieu of any other
benefit payable pursuant to the Supplemental Plan.
4.2(f) Enhanced Deferred Compensation Plan Benefits. For purposes
--------------------------------------------
of determining the amount payable to Executive pursuant to the
Angelica Corporation Deferred Compensation Option Plan for Selected
Management Employees (the "Deferred Compensation Plan"), the
attained age of the Executive and years of service with the Company
shall be determined as if the Executive were ten years older than
her actual age (but not older than age 65) and had continued to be
employed by the Company until age 65 (but not more than ten years
of imputed service). The Executive shall be entitled to receive
such enhanced benefit in a single lump sum cash payment within
thirty (30) days after the Entitlement Date in an amount equal to
the present value of such enhanced Normal Retirement Benefits (as
defined in the Deferred Compensation Plan) of the Executive. Such
present value shall be determined on the basis of the average of
the interest rates, as reported in the Wall Street Journal as of
the close of trading for the 20 days that immediately preceded the
Entitlement Date on which the New York Stock Exchange was open for
trading, of the shortest term U.S. Treasury bond that matures at
least 20 years after the Entitlement Date. In the event enhanced
Deferred Compensation Plan benefits are payable pursuant to this
Section on account of a Triggering Transaction, and the Executive
is entitled to a benefit under Article VII of the Deferred
Compensation Plan on account of a Change in Control (as defined in
the Deferred Compensation Plan), the Executive shall be entitled to
the larger of the amounts computed pursuant to this Section and the
amounts computed pursuant to the Deferred Compensation Plan without
regard to this Section. Such benefit shall be in lieu of any other
benefit payable pursuant to the Deferred Compensation Plan.
4.2(g) Medical and Health Benefit Continuation. For a period of
---------------------------------------
ten years after the Entitlement Date and without cost to the
Executive and/or her family, the Company shall continue medical and
health benefits to the Executive and/or the Executive's family at
least equal to those which were being provided to them prior to the
Date of Termination; provided, however, that if the Executive
-----------------
becomes reemployed with another employer and is eligible to receive
medical or health benefits under another employer-provided plan,
the medical and health benefits described herein shall be secondary
to those provided under such other plan during such applicable
period of eligibility.
4.2(h) Other Benefits. To the extent not previously paid or
--------------
provided, the Company shall timely pay or provide to the Executive
and/or the Executive's family any Other Benefits required to be
paid or provided for which the Executive and/or the Executive's
family is eligible to receive pursuant to this Agreement and under
any plan, program, policy or practice or contract or agreement of
the Company as those provided generally to other peer executives
and their families.
4.2(i) Excess Parachute Payment. Anything in this Agreement
------------------------
to the contrary notwithstanding, in the event that it shall be
determined that any payment or distribution by the Company to or
for the benefit of Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise but determined without regard to any
additional payments required under this Section 4.2(i)) (a
"Payment") would
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<PAGE> 14
be subject to the excise tax imposed by Code Section 4999 (or any
successor provision) or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes
(and any interest or penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive retains
an amount of the Gross-Up Payment on an after-tax basis equal to
the Excise Tax imposed upon the Payment.
The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten
business days after the Executive is informed in writing of such
claim by the Internal Revenue Service and the notification shall
apprise the Company of the nature of the claim and the date on
which such claim is required to be paid. The Executive shall not
pay such claim prior to the expiration of a 30-day period following
the date on which the Executive has given such notification to the
Company (or such shorter period ending on the date that any payment
of taxes with respect to such claim is required). If the Company
notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall
cooperate with the Company in so contesting; provided, however,
-----------------
that the Company shall bear and pay all costs and expenses
(including additional interest and penalties) incurred in
connection with such contest, on an after-tax basis to the
Executive.
4.3 DEATH. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period (either prior or
subsequent to a Triggering Transaction), this Agreement shall terminate
without further obligations to the Executive's legal representatives under
this Agreement, other than for (i) payment of Accrued Obligations (as defined
in Section 4.1(a)) (which shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within thirty (30) days of
the Date of Termination) and (ii) the timely payment or provision of Other
Benefits (as defined in Section 4.1(d)), including death benefits pursuant to
the terms of any plan, policy, or arrangement of the Company.
4.4 DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period (either
prior or subsequent to a Triggering Transaction), this Agreement shall
terminate without further obligations to the Executive, other than for
(i) payment of Accrued Obligations (as defined in Section 4.1(a)) (which
shall be paid to the Executive in a lump sum in cash within thirty (30) days
of the Date of Termination) and (ii) the timely payment or provision of Other
Benefits (as defined in Section 4.1(d)) including Disability benefits
pursuant to the terms of any plan, policy or arrangement of the Company.
4.5 TERMINATION FOR CAUSE; OTHER THAN GOOD REASON. If the
Executive's employment shall be terminated for Cause during the Employment
Period (either prior or subsequent to a Triggering Transaction), this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive her Accrued Compensation (as
defined in this Section). If the Executive terminates employment with the
Company during the Employment Period, (excluding a termination for Good
Reason), this Agreement shall terminate without further obligations to the
Executive, other than for the payment of Accrued Compensation (as defined in
this Section) and the
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<PAGE> 15
timely payment or provision of Other Benefits (as defined in Section 4.1(d)).
In such case, all Accrued Compensation shall be paid to the Executive in a
lump sum in cash within thirty (30) days of the Date of Termination.
For the purpose of this Section, the term "Accrued Compensation"
means the sum of (i) the Executive's Annual Base Salary through the Date of
Termination to the extent not previously paid, (ii) any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon), and (iii) any accrued vacation pay in each case to the
extent not previously paid.
4.6 NON-EXCLUSIVITY OF RIGHTS; SUPERSESSION OF CERTAIN BENEFITS.
Except as provided in Sections 4.1(c) and 4.2(g) and in this Section 4.6,
nothing in this Agreement shall prevent or limit the Executive's continuing
or future participation in any plan, program, policy or practice provided by
the Company and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under
any contract or agreement with the Company. Amounts which are vested
benefits of which the Executive is otherwise entitled to receive under any
plan, policy, practice or program of, or any contract or agreement with, the
Company at or subsequent to the Date of Termination, shall be payable in
accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
4.7 FULL SETTLEMENT. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
the Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and,
except as provided in Sections 4.1(c) and 4.2(g), such amounts shall not be
reduced whether or not the Executive obtains other employment. The Company
agrees to pay promptly as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the Company, the
Executive or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive regarding the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Code Section
7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If there shall be any dispute between
the Company and the Executive (i) in the event of any termination of the
Executive's employment by the Company, whether such termination was for
Cause, or (ii) in the event of any termination of employment by the
Executive, whether Good Reason existed, then, unless and until there is a
final, nonappealable judgment by a court of competent jurisdiction declaring
that such termination was for Cause or that the determination by the
Executive of the existence of Good Reason was not made in good faith, the
Company shall pay all amounts, and provide all benefits, to the Executive
and/or the Executive's family or other beneficiaries, as the case may be,
that the Company would be required to pay or provide pursuant to Section 4.1
or 4.2 as though such termination were by the Company without Cause or by the
Executive with Good Reason; provided, however, that the Company shall not be
-----------------
required to pay any disputed amounts pursuant to this Section except upon
receipt of an undertaking by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudged by such court not to be
entitled.
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<PAGE> 16
SECTION 5: NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) It is agreed that during the period beginning on the date
the Term of this Agreement expires and ending one (1) year
thereafter, the Executive shall not, without prior written approval
of the Board, become an officer, employee, agent, partner, or
director of any business enterprise in substantial direct
competition (as defined in Section 5.1(b)) with the Company;
provided that, if the Executive is terminated by the Company
without Cause or if the Executive terminates her employment for
Good Reason, then he will not be subject to the restrictions of
this Section.
5.1(b) For purposes of Section 5.1, a business enterprise with
which the Executive becomes associated as an officer, employee,
agent, partner, or director shall be considered in substantial
direct competition, if such entity competes with the Company in any
business in which the Company is engaged and is within in the
Company's market area as of the date that the Employment Period
expires.
5.1(c) The above constraint shall not prevent the Executive from
making passive investments, not to exceed five percent (5%), in any
enterprise.
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company
and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process, communicate
or divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation
of the provisions of this Section constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.
SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal to the
Executive and, without the prior written consent of the Company, the rights
(but not the obligations) shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. Failure of the Company to obtain
such agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to terminate the
Agreement at her option on or after the Triggering Transaction Date for Good
Reason. As used in this Agreement,
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<PAGE> 17
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets which assumes and agrees to perform this Agreement
by operation of law, or otherwise.
SECTION 7: MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to time in the
future, provide other incentive programs and bonus arrangements to the
Executive with respect to the occurrence of a Triggering Event that will be
in addition to the benefits required to be paid in the designated
circumstances in connection with the occurrence of a Triggering Transaction.
Such additional incentive programs and/or bonus arrangements will affect or
abrogate the benefits to be paid under this Agreement only in the manner and
to the extent explicitly agreed to by the Executive in any such subsequent
program or arrangement.
7.2 NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses as set forth below; provided that all notices to the
Company shall be directed to the attention of the Chairman of the Board, or
to such other address as one party may have furnished to the other in writing
in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
Notice to Executive:
-------------------
Jill Witter
7267 Highway N
O'Fallon, MO 63366
Notice to Company:
-----------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
7.3 VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
7.4 WITHHOLDING. The Company may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
7.5 WAIVER. The Executive's or the Company's failure to insist
upon strict compliance with any provision hereof or any other provision of
this Agreement or the failure to assert any right the Executive or the
Company may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to Section 3.4
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
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<PAGE> 18
IN WITNESS WHEREOF, the Executive and, the Company, pursuant to the
authorization from its Board, have caused this Agreement to be executed in
its name on its behalf, all as of the day and year first above written.
/s/ Jill Witter
---------------------------------------
Jill Witter
ANGELICA CORPORATION
By /s/ L. J. Young
-------------------------------------
Name: L. J. Young
----------------------------------
Title: Chairman and President
---------------------------------
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<PAGE> 1
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into this
27th day of November, 1996, by and between Angelica Corporation, a
Missouri corporation ("Company"), and L. Linden Mann, an
individual ("Executive").
RECITALS
The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and
its stockholders to reinforce and encourage the continued
attention and dedication of the Executive to the Company as a
member of the Company's management and to assure that the Company
will have the continued dedication of the Executive,
notwithstanding the possibility or occurrence of a Triggering
Transaction (as defined below) with respect to the Company or any
of its Operating Lines of Business (as defined below). The Board
desires to provide for the continued employment of the Executive
on terms competitive with those of other corporations, and the
Executive is willing to rededicate himself and continue to serve
the Company. Additionally, the Board believes it is imperative
to diminish the inevitable distraction of the Executive by virtue
of the personal uncertainties and risks created by a potential or
pending Triggering Transaction and to encourage the Executive's
full attention and dedication to the Company currently and in the
event of any potential or pending Triggering Transaction, and to
provide the Executive with compensation and benefits arrangements
upon any breach of this Agreement by the Company or upon a
termination of employment either immediately prior to or after a
Triggering Transaction which ensure that the compensation and
benefits expectations of the Executive will be satisfied.
Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.
IT IS AGREED AS FOLLOWS:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the
following words and phrases, whether or not capitalized, shall
have the meanings specified below, unless the context plainly
requires a different meaning.
1.1(a) "ACCRUED COMPENSATION" has the meaning set
forth in Section 4.5 of this Agreement.
1.1(b) "ACCRUED OBLIGATIONS" has the meaning set
forth in Section 4.1(a) of this Agreement.
1.1(c) "ANNUAL BASE SALARY" has the meaning set
forth in Section 2.4(a) of this Agreement.
1.1(d) "BOARD" means the Board of Directors of the
Company.
1.1(e) "CAUSE" has the meaning set forth in Section
3.3 of this Agreement.
<PAGE> 2
1.1(f) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual,
entity or group, or a Person (within the
meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) of ownership of 30% or more
of either (a) the then outstanding shares of
common stock of the Company (the "Outstanding
Company Common Stock") or (b) the combined
voting power of the then outstanding voting
securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Company Voting Securities"); or
(ii) Individuals who, as the date hereof,
constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a
majority of the Board; provided, however,
-----------------
that any individual becoming a director
subsequent to the date hereof whose election,
or nomination for election by the Company's
stockholders, was approved by a vote of at
least a majority of the directors then
comprising the Incumbent Board shall be
considered as though such individual were a
member of the Incumbent Board, but excluding,
as a member of the Incumbent Board, any such
individual whose initial assumption of office
occurs as a result of either an actual or
threatened election contest (as such terms
are used in Rule l4a-11 of Regulation l4A
promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies
or consents by or on behalf of a Person other
than the Board; or
(iii) Approval by the stockholders of the
Company of a reorganization, merger or
consolidation, in each case, unless,
following such reorganization, merger or
consolidation, (a) more than 50% of,
respectively, the then outstanding shares of
common stock of the corporation resulting
from such reorganization, merger or
consolidation and the combined voting power
of the then outstanding voting securities of
such corporation entitled to vote generally
in the election of directors is then
beneficially owned, directly or indirectly,
by all or substantially all of the
individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such reorganization,
merger or consolidation in substantially the
same proportions as their ownership,
immediately prior to such reorganization,
merger or consolidation, of the Outstanding
Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (b) no
Person beneficially owns, directly or
indirectly, 30% or more of, respectively, the
then outstanding shares of common stock of
the corporation resulting from such
reorganization, merger or consolidation or
the combined voting power of the then
outstanding voting securities of such
corporation, entitled to vote generally in
the election of directors and (c) at least a
majority of the members of the board of
directors of the corporation resulting from
such reorganization, merger or consolidation
were members of the Incumbent Board at the
time of the execution of the initial
agreement providing for such reorganization,
merger or consolidation; or
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<PAGE> 3
(iv) Approval by the stockholders of the
Company of (a) a complete liquidation or
dissolution of the Company or (b) the sale or
other disposition of all or substantially all
of the assets of the Company, other than to a
corporation, with respect to which following
such sale or other disposition, (1) more than
50% of, respectively, the then outstanding
shares of common stock of such corporation
and the combined voting power of the then
outstanding voting securities of such
corporation entitled to vote generally in the
election of directors is then beneficially
owned, directly or indirectly, by all or
substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or
other disposition in substantially the same
proportion as their ownership, immediately
prior to such sale or other disposition, of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the
case may be, (2) no Person beneficially owns,
directly or indirectly, 30% or more of,
respectively, the then outstanding shares of
common stock of such corporation and the
combined voting power of the then outstanding
voting securities of such corporation
entitled to vote generally in the election of
directors and (3) at least a majority of the
members of the board of directors of such
corporation were members of the Incumbent
Board at the time of the execution of the
initial agreement or action of the Board
providing for such sale or other disposition
of assets of the Company.
1.1(g) "COMPANY" has the meaning set forth in the
first paragraph of this Agreement and, with regard to
successors, in Section 6.2 of this Agreement.
1.1(h) "CODE" shall mean the Internal Revenue Code
of 1986, as amended.
1.1(i) "CURRENT TARGET BONUS" has the meaning set
forth in Section 4.1(a) of this Agreement.
1.1(j) "DATE OF TERMINATION" has the meaning set
forth in Section 3.6 of this Agreement.
1.1(k) "DISABILITY" has the meaning set forth in
Section 3.2 of this Agreement.
1.1(l) "DISABILITY EFFECTIVE DATE" has the meaning
set forth in Section 3.2 of this Agreement.
1.1(m) "DISPOSITION OF A MAJOR PART" means:
(i) when used with reference to the stock of
an Operating Line of Business that is or
becomes a separate corporation, limited
liability corporation, partnership or other
business entity, the sale, exchange,
transfer, distribution or other disposition
of the ownership, either beneficially or of
record or both, by the Company of more than
50% of either (a) the then outstanding shares
of common stock (or the equivalent equity
interests) of such Operating Line of
Business, or (b) the combined voting power of
the then outstanding voting
-3-
<PAGE> 4
securities of such Operating Line of Business
entitled to vote generally in the election of
the Board or the equivalent governing body of
the Operating Line of Business;
(ii) when used with reference to the merger
or consolidation of an Operating Line of
Business that is or becomes a separate
corporation, limited liability corporation,
partnership or other business entity, any
such transaction that results in the Company
owning, either beneficially or of record or
both, less that 50% of either (a) the then
outstanding shares of common stock (or the
equivalent equity interests) of such
Operating Line of Business, or (b) the
combined voting power of the then outstanding
voting securities of such Operating Line of
Business entitled to vote generally in the
election of the Board or the equivalent
governing body of the Operating Line of
Business; or
(iii) when used with reference to the assets
of an Operating Line of Business, the sale,
exchange, transfer, liquidation, distribution
or other disposition of assets of such
Operating Line of Business (a) having a fair
market value (as determined by the Incumbent
Board) aggregating more than 50% of the
aggregate fair market value of all of the
assets of such Operating Line of Business as
of the Triggering Transaction Date, (b)
accounting for more than 50% of the aggregate
book value (net of depreciation and
amortization) of all of the assets of such
Operating Line of Business, as would be shown
on a balance sheet for such Operating Line of
Business, prepared in accordance with
generally accepted accounting principles then
in effect, as of the Triggering Transaction
Date; or (c) accounting for more than 50% of
the net income of such Operating Line of
Business, as would be shown on an income
statement, prepared in accordance with
generally accepted accounting principles then
in effect, for the 12 months ending on the
last day of the month immediately preceding
the month in which the Triggering Transaction
Date occurs.
1.1(n) "EFFECTIVE DATE" means the date of this
Agreement.
1.1(o) "EMPLOYMENT PERIOD" means the period beginning
on the Effective Date and ending on the later of (i)
December 31, 1999, or (ii) December 31 of any
succeeding fiscal year during which notice is given by
either party (as described in Section 1.1(dd) of this
Agreement) of such party's intent not to renew this
Agreement.
1.1(p) "EXCHANGE ACT" means the Securities Exchange
Act of 1934, as amended.
1.1(q) "EXCISE TAX" has the meaning set forth in
Section 4.2(e) of this Agreement.
1.1(r) "GOOD REASON" has the meaning set forth in
Section 3.4 of this Agreement.
1.1(s) "GROSS-UP PAYMENT" has the meaning set forth
in Section 4.2(i) of this Agreement.
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<PAGE> 5
1.1(t) "INCENTIVE BONUS" has the meaning set forth
in Section 2.4(b) of this Agreement.
1.1(u) "INCUMBENT BOARD" has the meaning set forth
in Section 1.1(f)(ii) of this Agreement.
1.1(v) "NOTICE OF TERMINATION" has the meaning set
forth in Section 3.5 of this Agreement.
1.1(w) "OPERATING LINES OF BUSINESS" means the
following lines of business of the Company, whether
operated as a division or as a separate subsidiary: (i)
textile rental and laundry services, which provides
textiles and laundry services, principally to health
care institutions, and, to a more limited extent, to
hotels, casinos, motels and restaurants in or near
major metropolitan areas of the United States; (ii)
uniform and business apparel manufacturing and
marketing, which manufactures and sells uniforms and
business apparel to a wide variety of institutions and
businesses in the United States, Canada and the United
Kingdom; and (iii) retail specialty stores, which
operates a nationwide chain of specialty retail stores
primarily for a clientele of nurses and other health
care professionals.
1.1(x) "OTHER BENEFITS" has the meaning set forth in
Section 4.1(d) of this Agreement.
1.1(y) "OUTSTANDING COMPANY COMMON STOCK" has the
meaning set forth in Section 1.1(f)(i) of this
Agreement.
1.1(z) "OUTSTANDING COMPANY VOTING SECURITIES" has
the meaning set forth in Section 1.1(f)(i) of this
Agreement.
1.1(aa) "PAYMENT" has the meaning set forth in
Section 4.2(i) of this Agreement.
1.1(bb) "PERSON" means any "person" within the
meaning of Sections 13(d) and 14(d) of the Exchange
Act.
1.1(cc) "SUPPLEMENTAL PLAN" has the meaning set forth
in Section 4.2(e) of this Agreement.
1.1(dd) "TERM" means the period that begins on the
Effective Date and ends on the earlier of: (i) the Date
of Termination as defined in Section 3.6 of this
Agreement, or (ii) the close of business on the later
of December 31, 1999 or December 31 of any renewal term
as set forth in Section 2.1 of this Agreement.
1.1(ee) "TRIGGERING TRANSACTION" means (i) a Change
in Control of the Company or (ii) a Disposition of a
Major Part of two or more of the Company's Operating
Lines of Business.
1.1(ff) "TRIGGERING TRANSACTION DATE" shall mean the
date of the Triggering Transaction.
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<PAGE> 6
1.2 GENDER AND NUMBER. When appropriate, pronouns in
this Agreement used in the masculine gender include the feminine
gender, words in the singular include the plural, and words in
the plural include the singular.
1.3 HEADINGS. All headings in this Agreement are
included solely for ease of reference and do not bear on the
interpretation of the text. Accordingly, as used in this
Agreement, the terms "Article" and "Section" mean the text that
accompanies the specified Article or Section of the Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Missouri, without reference to its conflict of law principles.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT. The Executive shall remain
in the employ of the Company throughout the Term of this Agreement
in accordance with the terms and provisions of this Agreement.
This Agreement will automatically renew for annual one-year
periods unless either party gives the other written notice, by
September 30, 1999, or September 30 of any succeeding year, of
such party's intent not to renew this Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Term of this Agreement, the
Executive shall serve as Controller and Assistant Secretary
subject to the reasonable directions of the Board. The
Executive shall have such authority and shall perform such
duties as are substantially similar to the authority and
duties assigned to him on the Effective Date, subject to the
control exercised by the Board from time to time.
2.2(b) Throughout the Term of this Agreement (but
excluding any periods of vacation and sick leave to which
the Executive is entitled), the Executive shall devote
reasonable attention and time during normal business hours
to the business and affairs of the Company and shall use his
reasonable best efforts to perform faithfully and
efficiently such responsibilities as are assigned to him
under or in accordance with this Agreement; provided that,
it shall not be a violation of this paragraph for the
Executive to (i) serve on corporate, civic or charitable
boards or committees, (ii) deliver lectures or fulfill
speaking engagements, or (iii) manage personal investments,
so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as
an employee of the Company in accordance with this Agreement
or violate the Company's conflict of interest policy as in
effect immediately prior to the Effective Date.
2.3 SITUS OF EMPLOYMENT. Throughout the Term of this
Agreement, the Executive's services shall be performed at the
location where the Executive was employed immediately prior to
the Effective Date, or any office of the Company which is located
in the greater St. Louis area.
2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. For the first calendar year
within the Term of this Agreement, the Executive shall
receive an annual base salary ("Annual Base Salary") of
Seventy-Nine thousand Six Hundred and Nineteen dollars
($79,619), which shall be paid
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<PAGE> 7
in equal or substantially equal semi-monthly installments.
During the Term of this Agreement, the Annual Base Salary
payable to the Executive shall be reviewed at least annually
and shall be increased at the discretion of the Board or the
Compensation Committee of the Board but shall not be reduced.
2.4(b) INCENTIVE BONUSES. In addition to Annual Base
Salary, the Executive shall be awarded the opportunity to
earn an incentive bonus on an annual basis ("Incentive
Bonus") under any incentive compensation plan which are
generally available to other peer executives of the Company.
During the Term of this Agreement, the annual target
Incentive Bonus which the Executive will have the
opportunity to earn shall be reviewed at least annually and
be increased at the discretion of the Board or the
Compensation Committee of the Board, but in no case shall
such target annual Incentive Bonus which the Executive will
have the opportunity to earn be reduced below Twenty-One
Thousand Dollars ($21,000) and, further, in no event shall
the Executive receive less than 50% of such annual target
Incentive Bonus.
2.4(c) INCENTIVE, SAVINGS AND RETIREMENT PLANS.
Throughout the Term of this Agreement, the Executive shall
be entitled to participate in all incentive, savings and
retirement plans generally available to other peer
executives of the Company.
2.4(d) WELFARE BENEFIT PLANS. Throughout the Term of
this Agreement (and thereafter, subject to Sections 4.1(c)
and 4.2(g) hereof), the Executive and/or the Executive's
family, as the case may be, shall be eligible for
participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs
provided by the Company (including, without limitation,
medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent
generally available to other peer executives of the Company.
2.4(e) EXPENSES. Throughout the Term of this Agreement,
the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies, practices and
procedures generally applicable to other peer executives of
the Company.
2.4(f) FRINGE BENEFITS. Throughout the Term of this
Agreement, the Executive shall be entitled to such fringe
benefits as generally are provided to other peer executives
of the Company.
2.4(g) OFFICE AND SUPPORT STAFF. Throughout the Term of
this Agreement, the Executive shall be entitled to an office
or offices of a size and with furnishings and other
appointments, and to personal secretarial and other
assistance, at least equal to those generally provided to
other peer executives of the Company.
2.4(h) VACATION. Throughout the Term of this Agreement,
the Executive shall be entitled to paid vacation in
accordance with the plans, policies, programs and practices
generally provided with respect to other peer executives of
the Company.
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<PAGE> 8
SECTION 3: TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period.
3.2 DISABILITY. If the Company determines in good
faith that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability set
forth below), the Company may give to the Executive written
notice in accordance with Section 7.2 of its intention to
terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective
on the thirtieth (30th) day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that,
within the thirty (30) days after such receipt, the Executive
shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability"
shall mean that the Executive has been unable to perform the
services required of the Executive hereunder on a full-time basis
for a period of one hundred eighty (180) consecutive business
days by reason of a physical and/or mental condition.
"Disability" shall be deemed to exist when certified by a
physician selected by the Company and acceptable to the Executive
or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Executive
will submit to such medical or psychiatric examinations and tests
as such physician deems necessary to make any such Disability
determination.
3.3 TERMINATION FOR CAUSE. The Company may terminate
the Executive's employment during the Employment Period for "Cause,"
which shall mean termination based upon: (i) the Executive's
willful and continued failure to substantially perform his duties
with the Company (other than as a result of incapacity due to
physical or mental condition), after a written demand for
substantial performance is delivered to the Executive by the
Company, which specifically identifies the manner in which the
Executive has not substantially performed his duties, (ii) the
Executive's commission of an act constituting a criminal offense
involving moral turpitude, dishonesty, or breach of trust, or
(iii) the Executive's material breach of any provision of this
Agreement. For purposes of this Section, no act, or failure to
act on the Executive's part shall be considered "willful" unless
done, or omitted to be done, without good faith and without
reasonable belief that the act or omission was in the best
interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause
unless and until (i) he receives a Notice of Termination from the
Company, (ii) he is given the opportunity, with counsel to be
heard before the Board, and (iii) the Board finds, in its good
faith opinion, the Executive was guilty of the conduct set forth
in the Notice of Termination.
3.4 GOOD REASON. The Executive may terminate his
employment with the Company for "Good Reason," which shall mean:
3.4(a) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 2.2(a) or any other action by the
Company which results in a material diminution in such
position, authority, duties or responsibilities, excluding
for this purpose any action not taken in bad faith and which
is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
3.4(b) (i) the failure by the Company to continue in
effect any benefit or compensation plan, stock ownership
plan, life insurance plan, health and accident plan or
disability plan to which the Executive is entitled as
specified in Section 2.4, (ii) the taking of any action
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<PAGE> 9
by the Company which would adversely affect the Executive's
participation in, or materially reduce the Executive's
benefits under, any plans described in Section 2.4, or
deprive the Executive of any material fringe benefit enjoyed
by the Executive as described in Section 2.4(f), or (iii)
the failure by the Company to provide the Executive with
paid vacation to which the Executive is entitled as
described in Section 2.4(h).
3.4(c) the Company's requiring the Executive to be based
at any office or location other than that described in
Section 2.3;
3.4(d) a material breach by the Company of any provision
of this Agreement;
3.4(e) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted
by this Agreement;
3.4(f) within a period ending at the close of business on
the date two (2) years after the Triggering Transaction Date
of any Change in Control, if the Company has failed to
comply with and satisfy Section 6.2 on or after such
Triggering Transaction Date; or
For purposes of this Section, any good faith determination
of "Good Reason" made by the Executive shall be conclusive.
3.5 NOTICE OF TERMINATION. Any termination by the
Company for Cause or Disability, or by the Executive for Good
Reason, shall be communicated by Notice of Termination to the other
party, given in accordance with Section 7.2. For purposes of
this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth
in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment
under the provision so indicated, and (iii) if the Date of
Termination (as defined in Section 3.6 hereof) is other than the
date of receipt of such notice, specifies the termination date
(which date shall be not more than fifteen (15) days after the
giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
3.6 DATE OF TERMINATION. "Date of Termination" means
(i) if the Executive's employment is terminated by the Company
for Cause, or by the Executive for Good Reason, the Date of
Termination shall be the date of receipt of the Notice of
Termination or any later date specified therein, as the case may
be, (ii) if the Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the
case may be, or (iii) if the Executive's employment is terminated
by the Company other than for Cause, death, or Disability, the
Date of Termination shall be the date of receipt of the Notice of
Termination; provided that if within thirty (30) days after any
Notice of Termination is given, the party receiving such Notice
of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual
written agreement of the parties, or by a final judgment, order
or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been
perfected).
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<PAGE> 10
SECTION 4: CERTAIN BENEFITS UPON TERMINATION.
4.1 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON NOT
IN CONNECTION WITH A TRIGGERING TRANSACTION. If, prior to a
Triggering Transaction during the Employment Period (except in
the event that one of the following terminations of employment
occurs within the six-month period prior to the earlier of (a) a
Triggering Transaction or (b) the execution of a definitive
agreement or contract that eventually results in a Triggering
Transaction, which shall result in the payment of severance
benefits set forth in Section 4.2 of this Agreement): (i) the
Company shall terminate the Executive's employment without Cause,
or (ii) the Executive shall terminate employment with the Company
for Good Reason, the Executive shall be entitled to the payment
of the benefits provided below as of the Date of Termination:
4.1(a) Accrued Obligations. Within thirty (30) days
-------------------
after the Date of Termination, the Company shall pay to the
Executive the sum of (1) the Executive's Annual Base Salary
through the Date of Termination to the extent not previously
paid, (2) the accrued benefit payable to the Executive under
any deferred compensation plan, program or arrangement in
which the Executive is a participant subject to the
computation of benefits provisions of such plan, program or
arrangement, and (3) any accrued vacation pay; in each case
to the extent not previously paid (the "Accrued
Obligations").
In addition, on the date that Incentive Bonuses are
paid to other peer executives for the year in which the
Executive's employment is terminated, the Executive will be
paid an amount equal to the product of the Current Target
Bonus multiplied by a fraction, the numerator of which is
the number of days during the fiscal year for which the
Incentive Bonus is paid prior to the Date of Termination and
denominator of which is 365. For purposes of this
Agreement, the term "Current Target Bonus" means the
Incentive Bonus that would have been paid to the Executive
for the fiscal year in which the termination of employment
occurred, if the Executive's employment had not been so
terminated and the Executive had earned 100% of the
Incentive Bonus that he could have earned for such year.
4.1(b) Annual Base Salary Continuation. For the
-------------------------------
remainder of the Employment Period, the Company shall pay to
the Executive, the Executive's then-current Annual Base
Salary as would have been paid to the Executive had the
Executive remained in the Company's employ throughout the
Employment Period; provided that in all cases the Executive
shall receive, at minimum, the then-current Annual Base
Salary for a period beginning on the Date of Termination and
ending two years thereafter. The Company at any time may
elect to pay the balance of such payments then remaining in
a lump sum, in which case the total of such payments shall
be discounted to present value on the basis of the
applicable Federal short-term monthly rate as determined
according to Code Section 1274(d) for the month in which the
Executive's Date of Termination occurred.
4.1(c) Medical and Health Benefit Continuation. For the
---------------------------------------
remainder of the Employment Period (but in no case less than
one (1) year after the Date of Termination), or such longer
period as any plan, program, practice or policy may provide,
the Company shall continue medical and health benefits to
the Executive and/or the Executive's family at least equal
to those which would have been provided to them in
accordance with the plans, programs, practices and policies
described in Section 2.4(d) if the Executive's employment
had not been terminated, in accordance with the plans,
practices, programs or policies of the
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<PAGE> 11
Company as those provided generally to other peer executives
and their families; provided, however, that if the Executive
-----------------
becomes reemployed with another employer and is eligible to
receive medical or health benefits under another
employer-provided plan, the medical and health benefits
described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility.
4.1(d) Other Benefits. To the extent not previously paid
--------------
or provided, the Company shall timely pay or provide to the
Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided for which the
Executive and/or the Executive's family is eligible to
receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of the
Company as those provided generally to other peer executives
and their families ("Other Benefits").
4.2 BENEFITS UPON TERMINATION IN CONNECTION WITH A
TRIGGERING TRANSACTION. If (a) a Triggering Transaction occurs
during the Employment Period and within three years after the
Triggering Transaction Date (i) the Company shall terminate the
Executive's employment without Cause, or (ii) the Executive shall
terminate employment with the Company for Good Reason, or,
alternatively, (b) if one of the above-described terminations of
employment occurs within the six-month period prior to the
earlier of (i) a Triggering Transaction or (ii) the execution of
a definitive agreement or contract that eventually results in a
Triggering Transaction, then the Executive shall become entitled
to the payment of the benefits as provided below as of either (y)
the Date of Termination, in the case where the sequence of the
requisite events is as set forth in subsection (a) above or (z)
the Triggering Transaction Date, in the case where the sequence
of the requisite events occurred as set forth in subsection (b)
above (the relevant date for purposes of entitlement to the
benefits set forth in this Section 4.2 is hereinafter referred to
as the "Entitlement Date"):
4.2(a) Accrued Obligations. Within thirty (30) days
-------------------
after the Entitlement Date, the Company shall pay to the
Executive the Accrued Obligations.
In addition, on the date that Incentive Bonuses are
paid to other peer executives for the year in which the
Executive's employment is terminated, the Executive will be
paid an amount equal to the product of the Current Target
Bonus multiplied by a fraction, the numerator of which is
the number of days during the fiscal year for which the
Incentive Bonus is paid prior to the Date of Termination and
denominator of which is 365.
4.2(b) Severance Amount. Within thirty (30) days after
----------------
the Entitlement Date, the Company shall pay to the Executive
as severance pay in a lump sum, in cash, an amount equal to
2.99 times an amount equal to his then-current Annual Base
Salary and Current Target Bonus. In the event such
severance amount is payable pursuant to this Section on
account of a Triggering Transaction, and the Executive is
entitled to a benefit under Article IV of the Angelica
Corporation Management Retention and Incentive Plan (the
"Management Retention Plan") on account of a Change in
Control (as defined in the Management Retention Plan), the
Executive shall be entitled to the larger of the amounts
computed pursuant to this Section and the amounts computed
pursuant to the Management Retention Plan without regard to
this Section. Such benefit shall be in lieu of any other
benefit payable pursuant to the Management Retention Plan.
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<PAGE> 12
4.2(c) Stock Options. To the extent not otherwise
-------------
provided for under the terms of the Company's stock option
plans or the Executive's stock option agreements, all stock
options held by the Executive that have not expired in
accordance with their respective terms shall vest and become
fully exercisable as of the Entitlement Date.
4.2(d) Stock Bonus and Incentive Plan Shares. To the
-------------------------------------
extent not otherwise provided for under the terms of the
Company's Stock Bonus and Incentive Plan, all "Matching
Shares" (as defined in such plan) held by or for the benefit
of the Executive that are unvested and restricted at the
Date of Termination shall vest and become unrestricted as of
the Entitlement Date and all "Elected Shares" (as defined in
such plan) held by or for the benefit of the Executive that
are restricted at the Date of Termination shall become
unrestricted as of the Entitlement Date.
4.2(e) Enhanced Supplemental Retirement Plan Benefits. The
----------------------------------------------
benefit payable to the Executive under the Angelica
Corporation Supplemental Plan (as originally effective April
1, 1980 and as amended from time to time, including a
restatement as of January 23, 1990) (the "Supplemental
Plan") shall be determined taking into account the following
modifications:
(i) The amount payable to the Executive pursuant to
Section 4 of the Supplemental Plan shall be
determined on the basis of the service with the
Company the Executive would have completed if he
had continued to be employed by the Company until
he attained age 65; provided such additional
imputed service shall not exceed ten years.
(ii) The Executive may begin to receive payments at any
time after he has reached age 55 without any
discount because the payments commence before the
Executive is age 65, regardless of the provisions
of Section 6 of the Supplemental Plan.
(iii) In addition to the benefit payable to the
Executive as determined above, if the Executive
has not attained age 65 as of his Entitlement
Date, he shall be entitled to receive a monthly
benefit equal to the amount of old-age insurance
benefit to which he would be entitled at age 65
under the Social Security Act, based upon the
assumption that he will continue to receive until
reaching age 65 compensation that would be treated
as wages for purposes of the Social Security Act
at the same rate as he received such compensation
at the time of retirement or severance, which
benefit shall commence on the Executive's
Entitlement Date and shall end when the Executive
attains the age of 65 years.
The Executive shall be entitled to receive his entire
benefit, including the enhanced benefits provided by this
Agreement, in a single lump sum cash payment within thirty
(30) days after the Entitlement Date, in which case the
total of such payments shall be discounted to present value
on the basis of the average of the interest rates, as
reported in the Wall Street Journal as of the close of
trading for the 20 days that immediately preceded the
Entitlement Date on which the New York Stock Exchange was
open for trading, of the shortest term U.S. Treasury bond
that matures at least 20 years after the Entitlement Date.
In the event enhanced Supplemental Plan benefits are payable
pursuant to this Section on account of a Triggering
Transaction, and the Executive is entitled to a benefit
under Section 10 of the
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<PAGE> 13
Supplemental Plan on account of a Change in Control (as
defined in the Supplemental Plan), the Executive shall be
entitled to the larger of the amounts computed pursuant to
this Section and the amounts computed pursuant to the
Supplemental Plan without regard to this Section. Such
benefit shall be in lieu of any other benefit payable
pursuant to the Supplemental Plan.
4.2(f) Enhanced Deferred Compensation Plan Benefits. For
--------------------------------------------
purposes of determining the amount payable to Executive
pursuant to the Angelica Corporation Deferred Compensation
Option Plan for Selected Management Employees (the "Deferred
Compensation Plan"), the attained age of the Executive and
years of service with the Company shall be determined as if
the Executive were ten years older than his actual age (but
not older than age 65) and had continued to be employed by
the Company until age 65 (but not more than ten years of
imputed service). The Executive shall be entitled to
receive such enhanced benefit in a single lump sum cash
payment within thirty (30) days after the Entitlement Date
in an amount equal to the present value of such enhanced
Normal Retirement Benefits (as defined in the Deferred
Compensation Plan) of the Executive. Such present value
shall be determined on the basis of the average of the
interest rates, as reported in the Wall Street Journal as of
the close of trading for the 20 days that immediately
preceded the Entitlement Date on which the New York Stock
Exchange was open for trading, of the shortest term U.S.
Treasury bond that matures at least 20 years after the
Entitlement Date. In the event enhanced Deferred
Compensation Plan benefits are payable pursuant to this
Section on account of a Triggering Transaction, and the
Executive is entitled to a benefit under Article VII of the
Deferred Compensation Plan on account of a Change in Control
(as defined in the Deferred Compensation Plan), the
Executive shall be entitled to the larger of the amounts
computed pursuant to this Section and the amounts computed
pursuant to the Deferred Compensation Plan without regard to
this Section. Such benefit shall be in lieu of any other
benefit payable pursuant to the Deferred Compensation Plan.
4.2(g) Medical and Health Benefit Continuation. For a
---------------------------------------
period of ten years after the Entitlement Date and without
cost to the Executive and/or his family, the Company shall
continue medical and health benefits to the Executive and/or
the Executive's family at least equal to those which were
being provided to them prior to the Date of Termination;
provided, however, that if the Executive becomes reemployed
-----------------
with another employer and is eligible to receive medical or
health benefits under another employer-provided plan, the
medical and health benefits described herein shall be
secondary to those provided under such other plan during
such applicable period of eligibility.
4.2(h) Other Benefits. To the extent not previously paid
--------------
or provided, the Company shall timely pay or provide to the
Executive and/or the Executive's family any Other Benefits
required to be paid or provided for which the Executive
and/or the Executive's family is eligible to receive
pursuant to this Agreement and under any plan, program,
policy or practice or contract or agreement of the Company
as those provided generally to other peer executives and
their families.
4.2(i) Excess Parachute Payment. Anything in this
------------------------
Agreement to the contrary notwithstanding, in the event that
it shall be determined that any payment or distribution by
the Company to or for the benefit of Executive (whether paid
or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise but determined without
regard to any additional payments required under this
Section 4.2(i)) (a "Payment") would
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<PAGE> 14
be subject to the excise tax imposed by Code Section 4999 (or
any successor provision) or any interest or penalties are
incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income taxes
(and any interest or penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment on an
after-tax basis equal to the Excise Tax imposed upon the
Payment.
The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the
Executive is informed in writing of such claim by the
Internal Revenue Service and the notification shall apprise
the Company of the nature of the claim and the date on which
such claim is required to be paid. The Executive shall not
pay such claim prior to the expiration of a 30-day period
following the date on which the Executive has given such
notification to the Company (or such shorter period ending
on the date that any payment of taxes with respect to such
claim is required). If the Company notifies the Executive
in writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall cooperate
with the Company in so contesting; provided, however, that
-----------------
the Company shall bear and pay all costs and expenses
(including additional interest and penalties) incurred in
connection with such contest, on an after-tax basis to the
Executive.
4.3 DEATH. If the Executive's employment is terminated
by reason of the Executive's death during the Employment Period
(either prior or subsequent to a Triggering Transaction), this
Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, other
than for (i) payment of Accrued Obligations (as defined in
Section 4.1(a)) (which shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination) and (ii) the timely payment
or provision of Other Benefits (as defined in Section 4.1(d)),
including death benefits pursuant to the terms of any plan,
policy, or arrangement of the Company.
4.4 DISABILITY. If the Executive's employment is terminated
by reason of the Executive's Disability during the Employment Period
(either prior or subsequent to a Triggering Transaction), this Agreement
shall terminate without further obligations to the Executive, other than
for (i) payment of Accrued Obligations (as defined in Section 4.1(a))
(which shall be paid to the Executive in a lump sum in cash within
thirty (30) days of the Date of Termination) and (ii) the timely payment
or provision of Other Benefits (as defined in Section 4.1(d)) including
Disability benefits pursuant to the terms of any plan, policy or
arrangement of the Company.
4.5 TERMINATION FOR CAUSE; OTHER THAN GOOD REASON. If
the Executive's employment shall be terminated for Cause during the
Employment Period (either prior or subsequent to a Triggering
Transaction), this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to
the Executive his Accrued Compensation (as defined in this
Section). If the Executive terminates employment with the
Company during the Employment Period, (excluding a termination
for Good Reason), this Agreement shall terminate without further
obligations to the Executive, other than for the payment of
Accrued Compensation (as defined in this Section) and the
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<PAGE> 15
timely payment or provision of Other Benefits (as defined in Section
4.1(d)). In such case, all Accrued Compensation shall be paid to
the Executive in a lump sum in cash within thirty (30) days of
the Date of Termination.
For the purpose of this Section, the term "Accrued
Compensation" means the sum of (i) the Executive's Annual Base
Salary through the Date of Termination to the extent not
previously paid, (ii) any compensation previously deferred by the
Executive (together with any accrued interest or earnings
thereon), and (iii) any accrued vacation pay in each case to the
extent not previously paid.
4.6 NON-EXCLUSIVITY OF RIGHTS; SUPERSESSION OF CERTAIN
BENEFITS. Except as provided in Sections 4.1(c) and 4.2(g) and
in this Section 4.6, nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any
plan, program, policy or practice provided by the Company and for
which the Executive may qualify, nor shall anything herein limit
or otherwise affect such rights as the Executive may have under
any contract or agreement with the Company. Amounts which are
vested benefits of which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of, or any
contract or agreement with, the Company at or subsequent to the
Date of Termination, shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except
as explicitly modified by this Agreement.
4.7 FULL SETTLEMENT. The Company's obligation to make
the payments provided for in this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this
Agreement and, except as provided in Sections 4.1(c) and 4.2(g),
such amounts shall not be reduced whether or not the Executive
obtains other employment. The Company agrees to pay promptly as
incurred, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company,
the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee
of performance thereof (including as a result of any contest by
the Executive regarding the amount of any payment pursuant to
this Agreement), plus in each case interest on any delayed
payment at the applicable Federal rate provided for in Code
Section 7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If there shall be any dispute
between the Company and the Executive (i) in the event of any
termination of the Executive's employment by the Company, whether
such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason
existed, then, unless and until there is a final, nonappealable
judgment by a court of competent jurisdiction declaring that such
termination was for Cause or that the determination by the
Executive of the existence of Good Reason was not made in good
faith, the Company shall pay all amounts, and provide all
benefits, to the Executive and/or the Executive's family or other
beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to Section 4.1 or 4.2 as
though such termination were by the Company without Cause or by
the Executive with Good Reason; provided, however, that the
-----------------
Company shall not be required to pay any disputed amounts
pursuant to this Section except upon receipt of an undertaking by
or on behalf of the Executive to repay all such amounts to which
the Executive is ultimately adjudged by such court not to be
entitled.
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<PAGE> 16
SECTION 5: NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) It is agreed that during the period beginning on
the date the Term of this Agreement expires and ending one
(1) year thereafter, the Executive shall not, without prior
written approval of the Board, become an officer, employee,
agent, partner, or director of any business enterprise in
substantial direct competition (as defined in Section
5.1(b)) with the Company; provided that, if the Executive is
terminated by the Company without Cause or if the Executive
terminates his employment for Good Reason, then he will not
be subject to the restrictions of this Section.
5.1(b) For purposes of Section 5.1, a business enterprise
with which the Executive becomes associated as an officer,
employee, agent, partner, or director shall be considered in
substantial direct competition, if such entity competes with
the Company in any business in which the Company is engaged
and is within in the Company's market area as of the date
that the Employment Period expires.
5.1(c) The above constraint shall not prevent the
Executive from making passive investments, not to exceed
five percent (5%), in any enterprise.
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold
in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company and which shall
not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of
this Agreement). After termination of the Executive's employment
with the Company, the Executive shall not, without the prior
written consent of the Company, or as may otherwise be required
by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted
violation of the provisions of this Section constitute a basis
for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal
to the Executive and, without the prior written consent of the
Company, the rights (but not the obligations) shall not be
assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and
agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if
no such succession had taken place. Failure of the Company to
obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle
the Executive to terminate the Agreement at his option on or
after the Triggering Transaction Date for Good Reason. As used
in this Agreement,
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<PAGE> 17
"Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
SECTION 7: MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to
time in the future, provide other incentive programs and bonus
arrangements to the Executive with respect to the occurrence of a
Triggering Event that will be in addition to the benefits
required to be paid in the designated circumstances in connection
with the occurrence of a Triggering Transaction. Such additional
incentive programs and/or bonus arrangements will affect or
abrogate the benefits to be paid under this Agreement only in the
manner and to the extent explicitly agreed to by the Executive in
any such subsequent program or arrangement.
7.2 NOTICE. For purposes of this Agreement, notices
and all other communications provided for in the Agreement shall
be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective
addresses as set forth below; provided that all notices to the
Company shall be directed to the attention of the Chairman of the
Board, or to such other address as one party may have furnished
to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
Notice to Executive:
-------------------
L. Linden Mann
2268 Hill House Road
Chesterfield, MO 63017
Notice to Company:
-----------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
7.3 VALIDITY. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
7.4 WITHHOLDING. The Company may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
7.5 WAIVER. The Executive's or the Company's failure
to insist upon strict compliance with any provision hereof or any
other provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 3.4 shall not be
deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
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<PAGE> 18
IN WITNESS WHEREOF, the Executive and, the Company, pursuant
to the authorization from its Board, have caused this Agreement to be
executed in its name on its behalf, all as of the day and year first
above written.
/s/ L. Linden Mann
---------------------------------------
L. Linden Mann
ANGELICA CORPORATION
By /s/ L. J. Young
-------------------------------------
Name: L. J. Young
----------------------------------
Title: Chairman and President
---------------------------------
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<PAGE> 1
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into this
2nd day of April, 1997, by and between Angelica Corporation, a
Missouri corporation ("Company"), and Alan D. Wilson, an individual
("Executive").
RECITALS
The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its
stockholders to reinforce and encourage the continued attention and
dedication of the Executive to the Company as a member of the
Company's management and to assure that the Company will have the
continued dedication of the Executive, notwithstanding the
possibility or occurrence of a Triggering Transaction (as defined
below) with respect to the Company or the Operating Line of
Business (as defined below). The Board desires to provide for the
continued employment of the Executive on terms competitive with
those of other corporations, and the Executive is willing to
rededicate himself and continue to serve the Company.
Additionally, the Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a potential or pending
Triggering Transaction and to encourage the Executive's full
attention and dedication to the Company currently and in the event
of any potential or pending Triggering Transaction, and to provide
the Executive with compensation and benefits arrangements upon any
breach of this Agreement by the Company or upon a termination of
employment either immediately prior to or after a Triggering
Transaction which ensure that the compensation and benefits
expectations of the Executive will be satisfied. Therefore, in
order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
IT IS AGREED AS FOLLOWS:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the
following words and phrases, whether or not capitalized, shall have
the meanings specified below, unless the context plainly requires
a different meaning.
1.1(a) "ACCRUED COMPENSATION" has the meaning
set forth in Section 4.5 of this Agreement.
1.1(b) "ACCRUED OBLIGATIONS" has the meaning set
forth in Section 4.1(a) of this Agreement.
1.1(c) "ANNUAL BASE SALARY" has the meaning set
forth in Section 2.4(a) of this Agreement.
1.1(d) "BOARD" means the Board of Directors of
the Company.
1.1(e) "CAUSE" has the meaning set forth in
Section 3.3 of this Agreement.
<PAGE> 2
1.1(f) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual,
entity or group, or a Person (within the
meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) of ownership of 30%
or more of either (a) the then
outstanding shares of common stock of the
Company (the "Outstanding Company Common
Stock") or (b) the combined voting power
of the then outstanding voting securities
of the Company entitled to vote generally
in the election of directors (the
"Outstanding Company Voting Securities");
or
(ii) Individuals who, as the date
hereof, constitute the Board (the
"Incumbent Board") cease for any reason
to constitute at least a majority of the
Board; provided, however, that any
-----------------
individual becoming a director subsequent
to the date hereof whose election, or
nomination for election by the Company's
stockholders, was approved by a vote of
at least a majority of the directors then
comprising the Incumbent Board shall be
considered as though such individual were
a member of the Incumbent Board, but
excluding, as a member of the Incumbent
Board, any such individual whose initial
assumption of office occurs as a result
of either an actual or threatened
election contest (as such terms are used
in Rule l4a-11 of Regulation l4A
promulgated under the Exchange Act) or
other actual or threatened solicitation
of proxies or consents by or on behalf of
a Person other than the Board; or
(iii) Approval by the stockholders of
the Company of a reorganization, merger
or consolidation, in each case, unless,
following such reorganization, merger or
consolidation, (a) more than 50% of,
respectively, the then outstanding shares
of common stock of the corporation
resulting from such reorganization,
merger or consolidation and the combined
voting power of the then outstanding
voting securities of such corporation
entitled to vote generally in the
election of directors is then
beneficially owned, directly or
indirectly, by all or substantially all
of the individuals and entities who were
the beneficial owners, respectively, of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such reorganization,
merger or consolidation in substantially
the same proportions as their ownership,
immediately prior to such reorganization,
merger or consolidation, of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities, as
the case may be, (b) no Person
beneficially owns, directly or
indirectly, 30% or more of, respectively,
the then outstanding shares of common
stock of the corporation resulting from
such reorganization, merger or
consolidation or the combined voting
power of the then outstanding voting
securities of such corporation, entitled
to vote generally in the election of
directors and (c) at least a majority of
the members of the board of directors of
the corporation resulting from such
reorganization, merger or consolidation
were members of the Incumbent Board at
the time of the execution of the initial
agreement providing for such
reorganization, merger or consolidation;
or
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<PAGE> 3
(iv) Approval by the stockholders of the
Company of (a) a complete liquidation or
dissolution of the Company or (b) the
sale or other disposition of all or
substantially all of the assets of the
Company, other than to a corporation,
with respect to which following such sale
or other disposition, (1) more than 50%
of, respectively, the then outstanding
shares of common stock of such
corporation and the combined voting power
of the then outstanding voting securities
of such corporation entitled to vote
generally in the election of directors is
then beneficially owned, directly or
indirectly, by all or substantially all
of the individuals and entities who were
the beneficial owners, respectively, of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such sale or other
disposition in substantially the same
proportion as their ownership,
immediately prior to such sale or other
disposition, of the Outstanding Company
Common Stock and Outstanding Company
Voting Securities, as the case may be,
(2) no Person beneficially owns, directly
or indirectly, 30% or more of,
respectively, the then outstanding shares
of common stock of such corporation and
the combined voting power of the then
outstanding voting securities of such
corporation entitled to vote generally in
the election of directors and (3) at
least a majority of the members of the
board of directors of such corporation
were members of the Incumbent Board at
the time of the execution of the initial
agreement or action of the Board
providing for such sale or other
disposition of assets of the Company.
1.1(g) "COMPANY" has the meaning set forth in
the first paragraph of this Agreement and, with
regard to successors, in Section 6.2 of this
Agreement.
1.1(h) "CODE" shall mean the Internal Revenue
Code of 1986, as amended.
1.1(i) "CURRENT TARGET BONUS" has the meaning
set forth in Section 4.1(a) of this Agreement.
1.1(j) "DATE OF TERMINATION" has the meaning set
forth in Section 3.6 of this Agreement.
1.1(k) "DISABILITY" has the meaning set forth in
Section 3.2 of this Agreement.
1.1(l) "DISABILITY EFFECTIVE DATE" has the
meaning set forth in Section 3.2 of this Agreement.
1.1(m) "DISPOSITION OF A MAJOR PART" means:
(i) when used with reference to the
stock of the Operating Line of Business
that is or becomes a separate
corporation, limited liability
corporation, partnership or other
business entity, the sale, exchange,
transfer, distribution or other
disposition of the ownership, either
beneficially or of record or both, by the
Company of more than 50% of either (a)
the then outstanding shares of common
stock (or the equivalent equity
interests) of the Operating Line of
Business, or (b) the combined voting
power of the then outstanding voting
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<PAGE> 4
securities of the Operating Line of
Business entitled to vote generally in
the election of the Board or the
equivalent governing body of the
Operating Line of Business;
(ii) when used with reference to the
merger or consolidation of the Operating
Line of Business that is or becomes a
separate corporation, limited liability
corporation, partnership or other
business entity, any such transaction
that results in the Company owning,
either beneficially or of record or both,
less that 50% of either (a) the then
outstanding shares of common stock (or
the equivalent equity interests) of the
Operating Line of Business, or (b) the
combined voting power of the then
outstanding voting securities of the
Operating Line of Business entitled to
vote generally in the election of the
Board or the equivalent governing body of
the Operating Line of Business; or
(iii) when used with reference to the
assets of the Operating Line of Business,
the sale, exchange, transfer,
liquidation, distribution or other
disposition of assets of the Operating
Line of Business (a) having a fair market
value (as determined by the Incumbent
Board) aggregating more than 50% of the
aggregate fair market value of all of the
assets of the Operating Line of Business
as of the Triggering Transaction Date,
(b) accounting for more than 50% of the
aggregate book value (net of depreciation
and amortization) of all of the assets of
the Operating Line of Business, as would
be shown on a balance sheet for the
Operating Line of Business, prepared in
accordance with generally accepted
accounting principles then in effect, as
of the Triggering Transaction Date, or
(c) accounting for more than 50% of the
net income of the Operating Line of
Business, as would be shown on an income
statement, prepared in accordance with
generally accepted accounting principles
then in effect, for the 12 months ending
on the last day of the month immediately
preceding the month in which the
Triggering Transaction Date occurs.
1.1(n) "EFFECTIVE DATE" means the date of this
Agreement.
1.1(o) "EMPLOYMENT PERIOD" means the period
beginning on the Effective Date and ending on the
later of (i) a date two years after the Effective
Date ("Ending Date") or (ii) the same date as the
Ending Date of any succeeding fiscal year during
which notice is given by either party (as described
in Section 1.1(aa) of this Agreement) of such
party's intent not to renew this Agreement.
1.1(p) "EXCHANGE ACT" means the Securities
Exchange Act of 1934, as amended.
1.1(q) "EXCISE TAX" has the meaning set forth in
Section 4.2(f) of this Agreement.
1.1(r) "GOOD REASON" has the meaning set forth
in Section 3.4 of this Agreement.
1.1(s) "GROSS-UP PAYMENT" has the meaning set
forth in Section 4.2(f) of this Agreement.
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<PAGE> 5
1.1(t) "INCENTIVE BONUS" has the meaning set
forth in Section 2.4(b) of this Agreement.
1.1(u) "INCUMBENT BOARD" has the meaning set
forth in Section 1.1(f)(ii) of this Agreement.
1.1(v) "NOTICE OF TERMINATION" has the meaning
set forth in Section 3.5 of this Agreement.
1.1(w) "OPERATING LINE OF BUSINESS" means the
following line of business of the Company, whether
operated as a division or as a separate subsidiary:
textile and laundry services, which provide
textiles and laundry service, principally to health
care institutions, and, to a more limited extent,
to hotels, casinos, motels and restaurants in or
near major metropolitan areas of the United States.
1.1(x) "OTHER BENEFITS" has the meaning set
forth in Section 4.1(c) of this Agreement.
1.1(y) "OUTSTANDING COMPANY COMMON STOCK" has
the meaning set forth in Section 1.1(f)(i) of this
Agreement.
1.1(z) "OUTSTANDING COMPANY VOTING SECURITIES"
has the meaning set forth in Section 1.1(f)(i) of
this Agreement.
1.1(aa) "PAYMENT" has the meaning set forth in
Section 4.2(f) of this Agreement.
1.1(bb) "PERSON" means any "person" within the
meaning of Sections 13(d) and 14(d) of the Exchange
Act.
1.1(cc) "TERM" means the period that begins on
the Effective Date and ends on the earlier of: (i)
the Date of Termination as defined in Section 3.6
of this Agreement, or (ii) the close of business on
the later of the Ending Date of the initial term or
any renewal term as set forth in Section 2.1 of
this Agreement.
1.1(dd) "TRIGGERING TRANSACTION" means (i) a
Change in Control of the Company or (ii) a
Disposition of a Major Part of the Operating Line
of Business.
1.1(ee) "TRIGGERING TRANSACTION DATE" shall mean
the date of the Triggering Transaction.
1.2 GENDER AND NUMBER. When appropriate, pronouns in
this Agreement used in the masculine gender include the feminine
gender, words in the singular include the plural, and words in the
plural include the singular.
1.3 HEADINGS. All headings in this Agreement are
included solely for ease of reference and do not bear on the
interpretation of the text. Accordingly, as used in this
Agreement, the terms "Article" and "Section" mean the text that
accompanies the specified Article or Section of the Agreement.
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<PAGE> 6
1.4 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Missouri,
without reference to its conflict of law principles.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT. The Executive shall remain in
the employ of the Company throughout the Term of this Agreement in
accordance with the terms and provisions of this Agreement. This
Agreement will automatically renew for annual one-year periods
unless either party gives the other written notice, within the
Ending Date of the initial term or any succeeding term, of such
party's intent not to renew this Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Term of this Agreement, the
Executive shall serve as President of the Operating Line
of Business, subject to the reasonable direction of the
Board and the Chief Executive Officer. The Executive
shall have such authority and shall perform such duties
as are substantially similar to the authority and duties
assigned to him on the Effective Date, subject to the
control exercised by the President of the Operating Line
of Business and the Board and the Chief Executive Officer
from time to time.
2.2(b) Throughout the Term of this Agreement (but
excluding any periods of vacation and sick leave to which
the Executive is entitled), the Executive shall devote
reasonable attention and time during normal business
hours to the business and affairs of the Company and
shall use his reasonable best efforts to perform
faithfully and efficiently such responsibilities as are
assigned to him under or in accordance with this
Agreement; provided that, it shall not be a violation of
this paragraph for the Executive to (i) serve on
corporate, civic or charitable boards or committees,
(ii) deliver lectures or fulfill speaking engagements or
(iii) manage personal investments, so long as such
activities do not significantly interfere with the
performance of the Executive's responsibilities as an
employee of the Company in accordance with this Agreement
or violate the Company's conflict of interest policy as
in effect immediately prior to the Effective Date.
2.3 SITUS OF EMPLOYMENT. Throughout the Term of this
Agreement, the Executive's services shall be performed at the
location where the Executive was employed immediately prior to the
Effective Date, or any office of the Company or any of its
subsidiaries to which Executive shall be transferred.
2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. For the first
calendar year within the Term of this Agreement, the
Executive shall receive an annual base salary ("Annual
Base Salary") of One hundred sixty thousand dollars
($160,000), which shall be paid in equal or substantially
equal semi-monthly installments. During the Term of this
Agreement, the Annual Base Salary payable to the Executive
shall be reviewed at least annually and shall be increased
at the discretion of the Board or the Chief Executive
Officer but shall not be reduced.
2.4(b) INCENTIVE BONUSES. In addition to Annual
Base Salary, the Executive shall be awarded the
opportunity to earn an incentive bonus on an annual basis
("Incentive
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<PAGE> 7
Bonus") under any incentive compensation plan which
are generally available to other similarly situated
executives of the Company. During the Term of this
Agreement, the annual target Incentive Bonus which the
Executive will have the opportunity to earn shall be
reviewed at least annually and be increased at the
discretion of the Board or the Chief Executive Officer.
2.4(c) WELFARE BENEFIT PLANS. Throughout the
Term of this Agreement (and thereafter), the Executive
and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies
and programs provided by the Company (including, without
limitation, medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental
death and travel accident insurance plans and programs)
to the extent generally available to other similarly
situated executives of the Company.
2.4(d) EXPENSES. Throughout the Term of this
Agreement, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the policies,
practices and procedures generally applicable to other
similarly situated executives of the Company.
2.4(e) OFFICE AND SUPPORT STAFF. Throughout the
Term of this Agreement, the Executive shall be entitled
to an office or offices of a size and with furnishings
and other appointments, and to personal secretarial and
other assistance, at least equal to those generally
provided to other similarly situated executives of the
Company.
2.4(f) VACATION. Throughout the Term of this
Agreement, the Executive shall be entitled to paid
vacation in accordance with the plans, policies, programs
and practices generally provided with respect to other
similarly situated executives of the Company.
SECTION 3: TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment
Period.
3.2 DISABILITY. If the Company determines in good faith
that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability set
forth below), the Company may give to the Executive written notice
in accordance with Section 7.2 of its intention to terminate the
Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the thirtieth (30th)
day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the thirty (30) days after
such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean that the Executive has been
unable to perform the services required of the Executive hereunder
on a full-time basis for a period of one hundred eighty (180)
consecutive business days by reason of a physical and/or mental
condition. "Disability" shall be deemed to exist when certified by
a physician selected by the Company and acceptable to the Executive
or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Executive will
submit to such medical or psychiatric examinations and tests as
such physician deems necessary to make any such Disability
determination.
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<PAGE> 8
3.3 TERMINATION FOR CAUSE. The Company may terminate
the Executive's employment during the Employment Period for
"Cause," which shall mean termination based upon: (i) the
Executive's willful and continued failure to substantially perform
his duties with the Company (other than as a result of incapacity
due to physical or mental condition), after a written demand for
substantial performance is delivered to the Executive by the
Company, which specifically identifies the manner in which the
Executive has not substantially performed his duties; (ii) the
Executive's commission of an act constituting a criminal offense
involving moral turpitude, dishonesty or breach of trust; or (iii)
the Executive's material breach of any provision of this Agreement.
For purposes of this Section, no act, or failure to act on the
Executive's part, shall be considered "willful" unless done, or
omitted to be done, without good faith and without reasonable
belief that the act or omission was in the best interest of the
Company. Notwithstanding the foregoing, the Executive shall not be
deemed to have been terminated for Cause unless and until (i) he
receives a Notice of Termination from the Company, (ii) he is given
the opportunity, with counsel, to be heard before the Board, and
(iii) the Board finds, in its good faith opinion, the Executive was
guilty of the conduct set forth in the Notice of Termination.
3.4 GOOD REASON. The Executive may terminate his
employment with the Company for "Good Reason," which shall mean:
3.4(a) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 2.2(a) or any other action by the
Company which results in a material diminution in such
position, authority, duties or responsibilities,
excluding for this purpose any action not taken in bad
faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
3.4(b) (i) the failure by the Company to continue
in effect any benefit or compensation plan, stock
ownership plan, life insurance plan, health and accident
plan or disability plan to which the Executive is
entitled as specified in Section 2.4, (ii) the taking of
any action by the Company which would adversely affect
the Executive's participation in, or materially reduce
the Executive's benefits under, any plans described in
Section 2.4, or (iii) the failure by the Company to
provide the Executive with paid vacation to which the
Executive is entitled as described in Section 2.4(f);
3.4(c) a material breach by the Company of any
provision of this Agreement;
3.4(d) any purported termination by the Company
of the Executive's employment otherwise than as expressly
permitted by this Agreement; or
3.4(e) within a period ending at the close of
business on the date two (2) years after the Triggering
Transaction Date of any Change in Control, if the Company
has failed to comply with and satisfy Section 6.2 on or
after such Triggering Transaction Date.
For purposes of this Section, any good faith
determination of "Good Reason" made by the Executive
shall be conclusive.
3.5 NOTICE OF TERMINATION. Any termination by the
Company for Cause or Disability, or by the Executive for Good
Reason, shall be communicated by Notice of Termination to the other
party, given in accordance with Section 7.2. For purposes of this
Agreement, a "Notice of Termination" means
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<PAGE> 9
a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, and (iii)
if the Date of Termination (as defined in Section 3.6 hereof) is
other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than fifteen (15)
days after the giving of such notice). The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company hereunder
or preclude the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights
hereunder.
3.6 DATE OF TERMINATION. "Date of Termination" means
(i) if the Executive's employment is terminated by the Company for
Cause, or by the Executive for Good Reason, the Date of Termination
shall be the date of receipt of the Notice of Termination or any
later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be,
or (iii) if the Executive's employment is terminated by the Company
other than for Cause, death or Disability, the Date of Termination
shall be the date of receipt of the Notice of Termination; provided
that if within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the
parties, or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected).
SECTION 4: CERTAIN BENEFITS UPON TERMINATION.
4.1 TERMINATION WITHOUT CAUSE NOT IN CONNECTION WITH
A TRIGGERING TRANSACTION. If, prior to a Triggering Transaction
during the Employment Period (except in the event that one of the
following terminations of employment occurs within the six-month
period prior to the earlier of (a) a Triggering Transaction or (b)
the execution of a definitive agreement or contract that eventually
results in a Triggering Transaction, which shall result in the
payment of severance benefits set forth in Section 4.2 of this
Agreement), the Company shall terminate the Executive's employment
without Cause, the Executive shall be entitled to the payment of
the benefits provided below as of the Date of Termination:
4.1(a) Accrued Obligations. Within thirty (30)
-------------------
days after the Date of Termination, the Company shall pay
to the Executive the sum of (1) the Executive's Annual
Base Salary through the Date of Termination to the extent
not previously paid, and (2) any accrued vacation pay; in
each case to the extent not previously paid (the "Accrued
Obligations").
In addition, on the date that Incentive Bonuses are
paid to other peer executives for the year in which the
Executive's employment is terminated, the Executive will
be paid an amount equal to the product of the Current
Target Bonus multiplied by a fraction, the numerator of
which is the number of days during the fiscal year for
which the Incentive Bonus is paid prior to the Date of
Termination and the denominator of which is 365. For
purposes of this Agreement, the term "Current Target
Bonus" means the Incentive Bonus that would have been
paid to the Executive for the fiscal year in which the
termination of employment occurred, if the Executive's
employment had not been so terminated and the Executive
had earned 100% of the Incentive Bonus that he could have
earned for such year.
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<PAGE> 10
4.1(b) Severance Payment. If the Date of
-----------------
Termination occurs within two years after the date
hereof, within thirty (30) days after the Date of
Termination, the Company shall pay to the Executive as
severance pay in a lump sum, in cash, an amount equal to
(i) one-twelfth the Executive's then-current Annual Base
Salary times (ii) twenty-four (24).
4.1(c) Other Benefits. To the extent not
--------------
previously paid or provided, the Company shall timely pay
or provide to the Executive and/or the Executive's family
any other amounts or benefits required to be paid or
provided for which the Executive and/or the Executive's
family is eligible to receive pursuant to this Agreement
and under any plan, program, policy or practice or
contract or agreement of the Company as those provided
generally to other peer executives and their families
("Other Benefits").
4.2 BENEFITS UPON TERMINATION IN CONNECTION WITH A
TRIGGERING TRANSACTION. If (a) a Triggering Transaction occurs
during the Employment Period and within two years after the
Triggering Transaction Date (i) the Company shall terminate the
Executive's employment without Cause, or (ii) the Executive shall
terminate employment with the Company for Good Reason, or,
--
alternatively, (b) if one of the above-described terminations of
employment occurs within the six-month period prior to the earlier
of (i) a Triggering Transaction or (ii) the execution of a
definitive agreement or contract that eventually results in a
Triggering Transaction, then the Executive shall become entitled to
the payment of the benefits as provided below as of either (y) the
Date of Termination, in the case where the sequence of the
requisite events is as set forth in subsection (a) above or (z) the
Triggering Transaction Date, in the case where the sequence of the
requisite events occurred as set forth in subsection (b) above (the
relevant date for purposes of entitlement to the benefits as set
forth in this Section 4.2 is hereinafter referred to as the
"Entitlement Date"):
4.2(a) Accrued Obligations. Within thirty (30)
-------------------
days after the Entitlement Date, the Company shall pay to
the Executive the Accrued Obligations.
In addition, on the date that Incentive Bonuses are
paid to other peer executives for the year in which the
Executive's employment is terminated, the Executive will
be paid an amount equal to the product of the Current
Target Bonus multiplied by a fraction, the numerator of
which is the number of days during the fiscal year for
which the Incentive Bonus is paid prior to the Date of
Termination and the denominator of which is 365.
4.2(b) Severance Amount. Within thirty (30) days
----------------
after the Entitlement Date, the Company shall pay to the
Executive as severance pay in a lump sum in cash, an
amount equal to two times an amount equal to his then-
current Annual Base Salary and Current Target Bonus. In
the event such severance amount is payable pursuant to
this Section on account of a Triggering Transaction, and
the Executive is entitled to a benefit under Article IV
of the Angelica Corporation Management Retention and
Incentive Plan (the "Management Retention Plan") on
account of a Change in Control (as defined in the
Management Retention Plan), the Executive shall be
entitled to the larger of the amounts computed pursuant
to this Section and the amounts computed pursuant to the
Management Retention Plan without regard to this Section.
Such benefit shall be in lieu of any other benefit
payable pursuant to the Management Retention Plan.
4.2(c) Stock Options. To the extent not
-------------
otherwise provided for under the terms of the Company's
stock option plans or the Executive's stock option
agreements, all stock
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<PAGE> 11
options held by the Executive that have not expired in
accordance with their respective terms shall vest and
become fully exercisable as of the Entitlement Date.
4.2(d) Stock Bonus and Incentive Plan Shares. To
-------------------------------------
the extent not otherwise provided for under the terms of
the Company's Stock Bonus and Incentive Plan, all
"Matching Shares" (as defined in such plan) held by or
for the benefit of the Executive that are unvested and
restricted at the Date of Termination shall vest and
become unrestricted as of the Entitlement Date and all
"Elected Shares" (as defined in such plan) held by or for
the benefit of the Executive that are restricted at the
Date of Termination shall become unrestricted as of the
Entitlement Date.
4.2(e) Retirement Agreement. The benefit payable
--------------------
to the Executive under the Retirement Agreement by and
between the Executive and the Company dated August 25,
1987 (the "Retirement Agreement") shall be determined on
the basis of years of service with the Company the
Executive would have completed if he had continued to be
employed by the Company until attained age 65; provided
such additional imputed service shall not exceed five (5)
years. Payments shall be made in accordance with the
terms of the Retirement Agreement.
4.2(f) Other Benefits. To the extent not
--------------
previously paid or provided, the Company shall timely pay
or provide to the Executive and/or the Executive's family
any Other Benefits required to be paid or provided for
which the Executive and/or the Executive's family is
eligible to receive pursuant to this Agreement and under
any plan, program, policy or practice or contract or
agreement of the Company as those provided generally to
other peer executives and their families.
Any provision in any plan or program of the Company
in which Executive is a participant that precludes
Executive from competing with the Company, or denies
Executive entitlement to a benefit in the event Executive
does compete with the Company, shall be null and void.
4.2(g) Excess Parachute Payment. Anything in
------------------------
this Agreement to the contrary notwithstanding, in the
event that it shall be determined that any payment or
distribution by the Company to or for the benefit of
Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise but determined without regard to any additional
payments required under this Section (a "Payment") would
be subject to the excise tax imposed by Code Section 4999
(or any successor provision) or any interest or penalties
are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as
the "Excise Tax"), then the Executive shall be entitled
to receive an additional payment (a "Gross-Up Payment")
in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed
with respect to such taxes), including, without
limitation, any income taxes (and any interest or
penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains
an amount of the Gross-Up Payment on an after-tax basis
equal to the Excise Tax imposed upon the Payment.
The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of
the Gross-Up
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<PAGE> 12
Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the
Executive is informed in writing of such claim by the
Internal Revenue Service and the notification shall
apprise the Company of the nature of the claim and the
date on which such claim is required to be paid. The
Executive shall not pay such claim prior to the
expiration of a 30-day period following the date on which
the Executive has given such notification to the Company
(or such shorter period ending on the date that any
payment of taxes with respect to such claim is required).
If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to
contest such claim, the Executive shall cooperate with
the Company in so contesting; provided, however, that the
-----------------
Company shall bear and pay all costs and expenses
(including additional interest and penalties) incurred in
connection with such contest, on an after-tax basis to
the Executive.
4.3 DEATH. If the Executive's employment is terminated
by reason of the Executive's death during the Employment Period
(either prior or subsequent to a Triggering Transaction), this
Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, other than
for (i) payment of Accrued Obligations (as defined in Section
4.1(a)) (which shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination) and (ii) the timely payment
or provision of Other Benefits (as defined in Section 4.1(c)),
including death benefits pursuant to the terms of any plan, policy,
or arrangement of the Company.
4.4 DISABILITY. If the Executive's employment is
terminated by reason of the Executive's Disability during the
Employment Period (either prior or subsequent to a Triggering
Transaction), this Agreement shall terminate without further
obligations to the Executive, other than for (i) payment of Accrued
Obligations (as defined in Section 4.1(a)) (which shall be paid to
the Executive in a lump sum in cash within thirty (30) days of the
Date of Termination) and (ii) the timely payment or provision of
Other Benefits (as defined in Section 4.1(c)) including Disability
benefits pursuant to the terms of any plan, policy or arrangement
of the Company.
4.5 TERMINATION FOR CAUSE; OTHER THAN GOOD REASON. If
the Executive's employment shall be terminated for Cause during the
Employment Period (either prior or subsequent to a Triggering
Transaction), this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to
the Executive his Accrued Compensation (as defined in this
Section). If the Executive terminates employment with the Company
during the Employment Period (excluding a termination for Good
Reason), this Agreement shall terminate without further obligations
to the Executive, other than for the payment of Accrued
Compensation (as defined in this Section) and the timely payment or
provision of Other Benefits (as defined in Section 4.1(c)). In such
case, all Accrued Compensation shall be paid to the Executive in a
lump sum in cash within thirty (30) days of the Date of
Termination.
For the purpose of this Section, the term "Accrued
Compensation" means the sum of (i) the Executive's Annual Base
Salary through the Date of Termination to the extent not previously
paid, (ii) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon), and (iii)
any accrued vacation pay in each case to the extent not previously
paid.
4.6 NON-EXCLUSIVITY OF RIGHTS; SUPERSESSION OF CERTAIN
BENEFITS. Except as provided in this Section 4.6, nothing in this
Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice
provided by the Company and for which the
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<PAGE> 13
Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or
agreement with the Company, except for the elimination of penalties
for competing as provided in Section 4.2(f). Amounts which are
vested benefits of which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of, or any
contract or agreement with, the Company at or subsequent to the Date
of Termination, shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
4.7 FULL SETTLEMENT. The Company's obligation to make
the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-
off, counterclaim, recoupment, defense or other claim, right or
action which the Company may have against the Executive or others.
In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of
this Agreement and such amounts shall not be reduced whether or not
the Executive obtains other employment. The Company agrees to pay
promptly as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as
a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability
of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any
contest by the Executive regarding the amount of any payment
pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Code
Section 7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If there shall be any
dispute between the Company and the Executive (i) in the event of
any termination of the Executive's employment by the Company,
whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason
existed, then, unless and until there is a final, nonappealable
judgment by a court of competent jurisdiction declaring that such
termination was for Cause or that the determination by the
Executive of the existence of Good Reason was not made in good
faith, the Company shall pay all amounts, and provide all benefits,
to the Executive and/or the Executive's family or other
beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to Section 4.1 or 4.2 as though
such termination were by the Company without Cause or by the
Executive with Good Reason; provided, however, that the Company
-----------------
shall not be required to pay any disputed amounts pursuant to this
Section except upon receipt of an undertaking by or on behalf of
the Executive to repay all such amounts to which the Executive is
ultimately adjudged by such court not to be entitled.
SECTION 5: NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) It is agreed that during the period
beginning on the date the Term of this Agreement expires
and ending one (1) year thereafter, the Executive shall
not, without prior written approval of the Board, become
an officer, employee, agent, partner or director of any
business enterprise in substantial direct competition (as
defined in Section 5.1(b)) with the Company; provided
that, if the Executive is terminated by the Company
without Cause or if the Executive terminates his
employment for Good Reason, then he will not be subject
to the restrictions of this Section.
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<PAGE> 14
5.1(b) For purposes of Section 5.1, a business
enterprise with which the Executive becomes associated as
an officer, employee, agent, partner or director shall be
considered in substantial direct competition, if such
entity competes with the Operating Line of Business and
is within the Company's market area as of the date that
the Employment Period expires.
5.1(c) The above constraint shall not prevent the
Executive from making passive investments, not to exceed
five percent (5%), in any enterprise.
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold
in a fiduciary capacity for the benefit of the Company all secret
or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company and which shall not be or
become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no
event shall an asserted violation of the provisions of this Section
constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal
to the Executive and, without the prior written consent of the
Company, the rights (but not the obligations) shall not be
assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree
to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle the Executive to
terminate the Agreement at his option on or after the Triggering
Transaction Date for Good Reason. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
SECTION 7: MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to time
in the future, provide other incentive programs and bonus
arrangements to the Executive with respect to the occurrence of a
Triggering Event that will be in addition to the benefits required
to be paid in the designated circumstances in connection with the
occurrence of a Triggering Transaction. Such additional incentive
programs and/or bonus arrangements will affect or abrogate the
benefits to be paid under this Agreement only in the manner and to
the extent explicitly agreed to by the Executive in any such
subsequent program or arrangement.
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<PAGE> 15
7.2 NOTICE. For purposes of this Agreement, notices and
all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered
or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses
as set forth below; provided that all notices to the Company shall
be directed to the attention of the Chairman of the Board, or to
such other address as one party may have furnished to the other in
writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
Notice to Executive:
-------------------
Alan D. Wilson
3150 N.W. 60th Street
Boca Raton, FL 33496
Notice to Company:
-----------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, MO 63017-3406
7.3 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
7.4 WITHHOLDING. The Company may withhold from any
amounts payable under this Agreement such Federal, state or local
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
7.5 WAIVER. The Executive's or the Company's failure to
insist upon strict compliance with any provision hereof or any
other provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 3.4 shall not be
deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
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<PAGE> 16
IN WITNESS WHEREOF, the Executive and, the Company,
pursuant to the authorization from its Board, have caused this
Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Alan D. Wilson
---------------------------------------
Alan D. Wilson
ANGELICA CORPORATION
By /s/ L. J. Young
-------------------------------------
Name: L. J. Young
----------------------------------
Title: Chairman and President
---------------------------------
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<PAGE> 1
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into this 8th day
of April, 1997, by and between Angelica Corporation, a Missouri corporation
("Company"), and Michael E. Burnham, an individual ("Executive").
RECITALS
The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its stockholders to
reinforce and encourage the continued attention and dedication of the
Executive to the Company as a member of the Company's management and to
assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility or occurrence of a Triggering Transaction (as
defined below) with respect to the Company or the Operating Line of Business
(as defined below). The Board desires to provide for the continued
employment of the Executive on terms competitive with those of other
corporations, and the Executive is willing to rededicate himself and continue
to serve the Company. Additionally, the Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a potential or pending Triggering
Transaction and to encourage the Executive's full attention and dedication to
the Company currently and in the event of any potential or pending Triggering
Transaction, and to provide the Executive with compensation and benefits
arrangements upon any breach of this Agreement by the Company or upon a
termination of employment either immediately prior to or after a Triggering
Transaction which ensure that the compensation and benefits expectations of
the Executive will be satisfied. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement.
IT IS AGREED AS FOLLOWS:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the following
words and phrases, whether or not capitalized, shall have the meanings
specified below, unless the context plainly requires a different meaning.
1.1(a) "ACCRUED COMPENSATION" has the meaning set forth in
Section 4.5 of this Agreement.
1.1(b) "ACCRUED OBLIGATIONS" has the meaning set forth in
Section 4.1(a) of this Agreement.
1.1(c) "ANNUAL BASE SALARY" has the meaning set forth in
Section 2.4(a) of this Agreement.
1.1(d) "BOARD" means the Board of Directors of the
Company.
1.1(e) "CAUSE" has the meaning set forth in Section 3.3 of
this Agreement.
<PAGE> 2
1.1(f) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual, entity or
group, or a Person (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of
ownership of 30% or more of either (a) the then
outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (b) the
combined voting power of the then outstanding
voting securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Company Voting Securities"); or
(ii) Individuals who, as the date hereof,
constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of
the Board; provided, however, that any individual
-----------------
becoming a director subsequent to the date hereof
whose election, or nomination for election by the
Company's stockholders, was approved by a vote of
at least a majority of the directors then
comprising the Incumbent Board shall be considered
as though such individual were a member of the
Incumbent Board, but excluding, as a member of the
Incumbent Board, any such individual whose initial
assumption of office occurs as a result of either
an actual or threatened election contest (as such
terms are used in Rule l4a-11 of Regulation l4A
promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board;
or
(iii) Approval by the stockholders of the Company
of a reorganization, merger or consolidation, in
each case, unless, following such reorganization,
merger or consolidation, (a) more than 50% of,
respectively, the then outstanding shares of common
stock of the corporation resulting from such
reorganization, merger or consolidation and the
combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all
or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger or
consolidation in substantially the same proportions
as their ownership, immediately prior to such
reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be,
(b) no Person beneficially owns, directly or
indirectly, 30% or more of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such reorganization,
merger or consolidation or the combined voting
power of the then outstanding voting securities of
such corporation, entitled to vote generally in the
election of directors and (c) at least a majority
of the members of the board of directors of the
corporation resulting from such reorganization,
merger or consolidation were members of the
Incumbent Board at the time of the execution of the
initial agreement providing for such
reorganization, merger or consolidation; or
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(iv) Approval by the stockholders of the Company
of (a) a complete liquidation or dissolution of the
Company or (b) the sale or other disposition of all
or substantially all of the assets of the Company,
other than to a corporation, with respect to which
following such sale or other disposition, (1) more
than 50% of, respectively, the then outstanding
shares of common stock of such corporation and the
combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all
or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition
in substantially the same proportion as their
ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as
the case may be, (2) no Person beneficially owns,
directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common
stock of such corporation and the combined voting
power of the then outstanding voting securities of
such corporation entitled to vote generally in the
election of directors and (3) at least a majority
of the members of the board of directors of such
corporation were members of the Incumbent Board at
the time of the execution of the initial agreement
or action of the Board providing for such sale or
other disposition of assets of the Company.
1.1(g) "COMPANY" has the meaning set forth in the first
paragraph of this Agreement and, with regard to successors, in
Section 6.2 of this Agreement.
1.1(h) "CODE" shall mean the Internal Revenue Code of
1986, as amended.
1.1(i) "CURRENT TARGET BONUS" has the meaning set forth in
Section 4.1(a) of this Agreement.
1.1(j) "DATE OF TERMINATION" has the meaning set forth in
Section 3.6 of this Agreement.
1.1(k) "DISABILITY" has the meaning set forth in Section
3.2 of this Agreement.
1.1(l) "DISABILITY EFFECTIVE DATE" has the meaning set
forth in Section 3.2 of this Agreement.
1.1(m) "DISPOSITION OF A MAJOR PART" means:
(i) when used with reference to the stock of the
Operating Line of Business that is or becomes a
separate corporation, limited liability
corporation, partnership or other business entity,
the sale, exchange, transfer, distribution or other
disposition of the ownership, either beneficially
or of record or both, by the Company of more than
50% of either (a) the then outstanding shares of
common stock (or the equivalent equity interests)
of the Operating Line of Business, or (b) the
combined voting power of the then outstanding
voting
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<PAGE> 4
securities of the Operating Line of Business
entitled to vote generally in the election of the
Board or the equivalent governing body of the
Operating Line of Business;
(ii) when used with reference to the merger or
consolidation of the Operating Line of Business
that is or becomes a separate corporation, limited
liability corporation, partnership or other
business entity, any such transaction that results
in the Company owning, either beneficially or of
record or both, less that 50% of either (a) the
then outstanding shares of common stock (or the
equivalent equity interests) of the Operating Line
of Business, or (b) the combined voting power of
the then outstanding voting securities of the
Operating Line of Business entitled to vote
generally in the election of the Board or the
equivalent governing body of the Operating Line of
Business; or
(iii) when used with reference to the assets of the
Operating Line of Business, the sale, exchange,
transfer, liquidation, distribution or other
disposition of assets of the Operating Line of
Business (a) having a fair market value (as
determined by the Incumbent Board) aggregating more
than 50% of the aggregate fair market value of all
of the assets of the Operating Line of Business as
of the Triggering Transaction Date, (b) accounting
for more than 50% of the aggregate book value (net
of depreciation and amortization) of all of the
assets of the Operating Line of Business, as would
be shown on a balance sheet for the Operating Line
of Business, prepared in accordance with generally
accepted accounting principles then in effect, as
of the Triggering Transaction Date, or (c)
accounting for more than 50% of the net income of
the Operating Line of Business, as would be shown
on an income statement, prepared in accordance with
generally accepted accounting principles then in
effect, for the 12 months ending on the last day of
the month immediately preceding the month in which
the Triggering Transaction Date occurs.
1.1(n) "EFFECTIVE DATE" means the date of this Agreement.
1.1(o) "EMPLOYMENT PERIOD" means the period beginning on
the Effective Date and ending on the later of (i) a date two
years after the Effective Date ("Ending Date") or (ii) the
same date as the Ending Date of any succeeding fiscal year
during which notice is given by either party (as described in
Section 1.1(aa) of this Agreement) of such party's intent not
to renew this Agreement.
1.1(p) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
1.1(q) "EXCISE TAX" has the meaning set forth in Section
4.2(f) of this Agreement.
1.1(r) "GOOD REASON" has the meaning set forth in Section
3.4 of this Agreement.
1.1(s) "GROSS-UP PAYMENT" has the meaning set forth in
Section 4.2(f) of this Agreement.
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<PAGE> 5
1.1(t) "INCENTIVE BONUS" has the meaning set forth in
Section 2.4(b) of this Agreement.
1.1(u) "INCUMBENT BOARD" has the meaning set forth in
Section 1.1(f)(ii) of this Agreement.
1.1(v) "NOTICE OF TERMINATION" has the meaning set forth in
Section 3.5 of this Agreement.
1.1(w) "OPERATING LINE OF BUSINESS" means the following
line of business of the Company, whether operated as a
division or as a separate subsidiary: retail specialty stores,
which line of business operates a nationwide chain of
specialty retail stores primarily for a clientele of nurses
and other health care professionals.
1.1(x) "OTHER BENEFITS" has the meaning set forth in
Section 4.1(c) of this Agreement.
1.1(y) "OUTSTANDING COMPANY COMMON STOCK" has the meaning
set forth in Section 1.1(f)(i) of this Agreement.
1.1(z) "OUTSTANDING COMPANY VOTING SECURITIES" has the
meaning set forth in Section 1.1(f)(i) of this Agreement.
1.1(aa) "PAYMENT" has the meaning set forth in Section
4.2(f) of this Agreement.
1.1(bb) "PERSON" means any "person" within the meaning of
Sections 13(d) and 14(d) of the Exchange Act.
1.1(cc) "TERM" means the period that begins on the Effective
Date and ends on the earlier of: (i) the Date of Termination
as defined in Section 3.6 of this Agreement, or (ii) the close
of business on the later of the Ending Date of the initial
term or any renewal term as set forth in Section 2.1 of this
Agreement.
1.1(dd) "TRIGGERING TRANSACTION" means (i) a Change in
Control of the Company or (ii) a Disposition of a Major Part
of the Operating Line of Business.
1.1(ee) "TRIGGERING TRANSACTION DATE" shall mean the date of
the Triggering Transaction.
1.2 GENDER AND NUMBER. When appropriate, pronouns in this
Agreement used in the masculine gender include the feminine gender, words in
the singular include the plural, and words in the plural include the
singular.
1.3 HEADINGS. All headings in this Agreement are included solely
for ease of reference and do not bear on the interpretation of the text.
Accordingly, as used in this Agreement, the terms "Article" and "Section"
mean the text that accompanies the specified Article or Section of the
Agreement.
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<PAGE> 6
1.4 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri, without
reference to its conflict of law principles.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT. The Executive shall remain in the
employ of the Company throughout the Term of this Agreement in accordance
with the terms and provisions of this Agreement. This Agreement will
automatically renew for annual one-year periods unless either party gives the
other written notice, within the Ending Date of the initial term or any
succeeding term, of such party's intent not to renew this Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Term of this Agreement, the Executive
shall serve as President of the Operating Line of Business, subject
to the reasonable direction of the Board and the Chief Executive
Officer. The Executive shall have such authority and shall perform
such duties as are substantially similar to the authority and
duties assigned to him on the Effective Date, subject to the
control exercised by the Board and the Chief Executive Officer from
time to time.
2.2(b) Throughout the Term of this Agreement (but excluding
any periods of vacation and sick leave to which the Executive is
entitled), the Executive shall devote reasonable attention and time
during normal business hours to the business and affairs of the
Company and shall use his reasonable best efforts to perform
faithfully and efficiently such responsibilities as are assigned to
him under or in accordance with this Agreement; provided that, it
shall not be a violation of this paragraph for the Executive to
(i) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures or fulfill speaking engagements or
(iii) manage personal investments, so long as such activities do
not significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with
this Agreement or violate the Company's conflict of interest policy
as in effect immediately prior to the Effective Date.
2.3 SITUS OF EMPLOYMENT. Throughout the Term of this Agreement,
the Executive's services shall be performed at the location where the
Executive was employed immediately prior to the Effective Date, or any office
of the Company or any of its subsidiaries to which Executive shall be
transferred.
2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. For the first calendar year
within the Term of this Agreement, the Executive shall receive an
annual base salary ("Annual Base Salary") of One hundred five
thousand dollars ($105,000), which shall be paid in equal or
substantially equal semi-monthly installments. During the Term of
this Agreement, the Annual Base Salary payable to the Executive
shall be reviewed at least annually and shall be increased at the
discretion of the Board or the Chief Executive Officer but shall
not be reduced.
2.4(b) INCENTIVE BONUSES. In addition to Annual Base
Salary, the Executive shall be awarded the opportunity to earn an
incentive bonus on an annual basis ("Incentive
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<PAGE> 7
Bonus") under any incentive compensation plan which are generally
available to other similarly situated executives of the Company.
During the Term of this Agreement, the annual target Incentive
Bonus which the Executive will have the opportunity to earn shall
be reviewed at least annually and be increased at the discretion of
the Board or the Chief Executive Officer.
2.4(c) WELFARE BENEFIT PLANS. Throughout the Term of this
Agreement (and thereafter), the Executive and/or the Executive's
family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company
(including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and programs)
to the extent generally available to other similarly situated
executives of the Company.
2.4(d) EXPENSES. Throughout the Term of this Agreement,
the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance
with the policies, practices and procedures generally applicable to
other similarly situated executives of the Company.
2.4(e) OFFICE AND SUPPORT STAFF. Throughout the Term of
this Agreement, the Executive shall be entitled to an office or
offices of a size and with furnishings and other appointments, and
to personal secretarial and other assistance, at least equal to
those generally provided to other similarly situated executives of
the Company.
2.4(f) VACATION. Throughout the Term of this Agreement,
the Executive shall be entitled to paid vacation in accordance with
the plans, policies, programs and practices generally provided with
respect to other similarly situated executives of the Company.
SECTION 3: TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period.
3.2 DISABILITY. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), the Company may
give to the Executive written notice in accordance with Section 7.2 of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the thirty (30) days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean that the Executive has been unable to perform the
services required of the Executive hereunder on a full-time basis for a
period of one hundred eighty (180) consecutive business days by reason of a
physical and/or mental condition. "Disability" shall be deemed to exist when
certified by a physician selected by the Company and acceptable to the
Executive or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Executive will submit to
such medical or psychiatric examinations and tests as such physician deems
necessary to make any such Disability determination.
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<PAGE> 8
3.3 TERMINATION FOR CAUSE. The Company may terminate the
Executive's employment during the Employment Period for "Cause," which shall
mean termination based upon: (i) the Executive's willful and continued
failure to substantially perform his duties with the Company (other than as
a result of incapacity due to physical or mental condition), after a written
demand for substantial performance is delivered to the Executive by the
Company, which specifically identifies the manner in which the Executive has
not substantially performed his duties; (ii) the Executive's commission of an
act constituting a criminal offense involving moral turpitude, dishonesty or
breach of trust; or (iii) the Executive's material breach of any provision of
this Agreement. For purposes of this Section, no act, or failure to act on
the Executive's part, shall be considered "willful" unless done, or omitted
to be done, without good faith and without reasonable belief that the act or
omission was in the best interest of the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for
Cause unless and until (i) he receives a Notice of Termination from the
Company, (ii) he is given the opportunity, with counsel, to be heard before
the Board, and (iii) the Board finds, in its good faith opinion, the
Executive was guilty of the conduct set forth in the Notice of Termination.
3.4 GOOD REASON. Pursuant to Section 4.2, the Executive may
terminate his employment with the Company for "Good Reason," which shall
mean:
3.4(a) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section
2.2(a) or any other action by the Company which results in a
material diminution in such position, authority, duties or
responsibilities, excluding for this purpose any action not taken
in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
3.4(b) (i) the failure by the Company to continue in effect
any benefit or compensation plan, stock ownership plan, life
insurance plan, health and accident plan or disability plan to
which the Executive is entitled as specified in Section 2.4, (ii)
the taking of any action by the Company which would adversely
affect the Executive's participation in, or materially reduce the
Executive's benefits under, any plans described in Section 2.4, or
(iii) the failure by the Company to provide the Executive with paid
vacation to which the Executive is entitled as described in Section
2.4(f);
3.4(c) a material breach by the Company of any provision of
this Agreement;
3.4(d) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by
this Agreement; or
3.4(e) within a period ending at the close of business on
the date two (2) years after the Triggering Transaction Date of any
Change in Control, if the Company has failed to comply with and
satisfy Section 6.2 on or after such Triggering Transaction Date.
For purposes of this Section, any good faith determination of
"Good Reason" made by the Executive shall be conclusive.
3.5 NOTICE OF TERMINATION. Any termination by the Company for
Cause or Disability, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party, given in accordance
with Section 7.2. For purposes of this Agreement, a "Notice of Termination"
means
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<PAGE> 9
a written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated,
and (iii) if the Date of Termination (as defined in Section 3.6 hereof) is
other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than fifteen (15) days after the giving of such
notice). The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing
of Good Reason or Cause shall not waive any right of the Executive or the
Company hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the Company's
rights hereunder.
3.6 DATE OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the Date of Termination shall be the date of
receipt of the Notice of Termination or any later date specified therein, as
the case may be, (ii) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be, or
(iii) if the Executive's employment is terminated by the Company other than
for Cause, death or Disability, the Date of Termination shall be the date of
receipt of the Notice of Termination; provided that if within thirty (30)
days after any Notice of Termination is given, the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date on
which the dispute is finally determined, either by mutual written agreement
of the parties, or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been perfected).
SECTION 4: CERTAIN BENEFITS UPON TERMINATION.
4.1 TERMINATION WITHOUT CAUSE NOT IN CONNECTION WITH A TRIGGERING
TRANSACTION. If, prior to a Triggering Transaction during the Employment
Period (except in the event that one of the following terminations of
employment occurs within the six-month period prior to the earlier of (a) a
Triggering Transaction or (b) the execution of a definitive agreement or
contract that eventually results in a Triggering Transaction, which shall
result in the payment of severance benefits set forth in Section 4.2 of this
Agreement), the Company shall terminate the Executive's employment without
Cause, the Executive shall be entitled to the payment of the benefits
provided below as of the Date of Termination:
4.1(a) Accrued Obligations. Within thirty (30) days after
-------------------
the Date of Termination, the Company shall pay to the Executive the
sum of (1) the Executive's Annual Base Salary through the Date of
Termination to the extent not previously paid, and (2) any accrued
vacation pay; in each case to the extent not previously paid (the
"Accrued Obligations").
In addition, on the date that Incentive Bonuses are paid to
other peer executives for the year in which the Executive's
employment is terminated, the Executive will be paid an amount
equal to the product of the Current Target Bonus multiplied by a
fraction, the numerator of which is the number of days during the
fiscal year for which the Incentive Bonus is paid prior to the Date
of Termination and the denominator of which is 365. For purposes
of this Agreement, the term "Current Target Bonus" means the
Incentive Bonus that would have been paid to the Executive for the
fiscal year in which the termination of employment occurred, if the
Executive's employment had not been so terminated and the Executive
had earned 100% of the Incentive Bonus that he could have earned
for such year.
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4.1(b) Severance Payment. If the Date of Termination
-----------------
occurs within two years after the date hereof, within thirty (30)
days after the Date of Termination, the Company shall pay to the
Executive as severance pay in a lump sum, in cash, an amount equal
to (i) one-twelfth the Executive's then-current Annual Base Salary
times (ii) twenty-four (24).
4.1(c) Other Benefits. To the extent not previously paid
--------------
or provided, the Company shall timely pay or provide to the
Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided for which the Executive
and/or the Executive's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or
contract or agreement of the Company as those provided generally to
other peer executives and their families ("Other Benefits").
4.2 BENEFITS UPON TERMINATION IN CONNECTION WITH A TRIGGERING
TRANSACTION. If (a) a Triggering Transaction occurs during the Employment
Period and within two years after the Triggering Transaction Date (i) the
Company shall terminate the Executive's employment without Cause, or (ii) the
Executive shall terminate employment with the Company for Good Reason, or,
--
alternatively, (b) if one of the above-described terminations of employment
occurs within the six-month period prior to the earlier of (i) a Triggering
Transaction or (ii) the execution of a definitive agreement or contract that
eventually results in a Triggering Transaction, then the Executive shall
become entitled to the payment of the benefits as provided below as of either
(y) the Date of Termination, in the case where the sequence of the requisite
events is as set forth in subsection (a) above or (z) the Triggering
Transaction Date, in the case where the sequence of the requisite events
occurred as set forth in subsection (b) above (the relevant date for purposes
of entitlement to the benefits as set forth in this Section 4.2 is
hereinafter referred to as the "Entitlement Date"):
4.2(a) Accrued Obligations. Within thirty (30) days after
-------------------
the Entitlement Date, the Company shall pay to the Executive the
Accrued Obligations.
In addition, on the date that Incentive Bonuses are paid to
other peer executives for the year in which the Executive's
employment is terminated, the Executive will be paid an amount
equal to the product of the Current Target Bonus multiplied by a
fraction, the numerator of which is the number of days during the
fiscal year for which the Incentive Bonus is paid prior to the Date
of Termination and the denominator of which is 365.
4.2(b) Severance Amount. Within thirty (30) days after the
----------------
Entitlement Date, the Company shall pay to the Executive as
severance pay in a lump sum in cash, an amount equal to two times
an amount equal to his then-current Annual Base Salary and Current
Target Bonus. In the event such severance amount is payable
pursuant to this Section on account of a Triggering Transaction,
and the Executive is entitled to a benefit under Article IV of the
Angelica Corporation Management Retention and Incentive Plan (the
"Management Retention Plan") on account of a Change in Control (as
defined in the Management Retention Plan), the Executive shall be
entitled to the larger of the amounts computed pursuant to this
Section and the amounts computed pursuant to the Management
Retention Plan without regard to this Section. Such benefit shall
be in lieu of any other benefit payable pursuant to the Management
Retention Plan.
4.2(c) Stock Options. To the extent not otherwise provided
-------------
for under the terms of the Company's stock option plans or the
Executive's stock option agreements, all stock
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<PAGE> 11
options held by the Executive that have not expired in accordance
with their respective terms shall vest and become fully exercisable
as of the Entitlement Date.
4.2(d) Stock Bonus and Incentive Plan Shares. To the extent
-------------------------------------
not otherwise provided for under the terms of the Company's Stock
Bonus and Incentive Plan, all "Matching Shares" (as defined in such
plan) held by or for the benefit of the Executive that are unvested
and restricted at the Date of Termination shall vest and become
unrestricted as of the Entitlement Date and all "Elected Shares"
(as defined in such plan) held by or for the benefit of the
Executive that are restricted at the Date of Termination shall
become unrestricted as of the Entitlement Date.
4.2(e) Other Benefits. To the extent not previously paid
--------------
or provided, the Company shall timely pay or provide to the
Executive and/or the Executive's family any Other Benefits required
to be paid or provided for which the Executive and/or the
Executive's family is eligible to receive pursuant to this
Agreement and under any plan, program, policy or practice or
contract or agreement of the Company as those provided generally to
other peer executives and their families.
Any provision in any plan or program of the Company in which
Executive is a participant that precludes Executive from competing
with the Company, or denies Executive entitlement to a benefit in
the event Executive does compete with the Company, shall be null
and void.
4.2(f) Excess Parachute Payment. Anything in this Agreement
------------------------
to the contrary notwithstanding, in the event that it shall be
determined that any payment or distribution by the Company to or
for the benefit of Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise but determined without regard to any
additional payments required under this Section (a "Payment") would
be subject to the excise tax imposed by Code Section 4999 (or any
successor provision) or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes
(and any interest or penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive retains
an amount of the Gross-Up Payment on an after-tax basis equal to
the Excise Tax imposed upon the Payment.
The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten
business days after the Executive is informed in writing of such
claim by the Internal Revenue Service and the notification shall
apprise the Company of the nature of the claim and the date on
which such claim is required to be paid. The Executive shall not
pay such claim prior to the expiration of a 30-day period following
the date on which the Executive has given such notification to the
Company (or such shorter period ending on the date that any payment
of taxes with respect to such claim is required). If the Company
notifies the Executive in writing prior to the expiration of such
period that it desires to contest such
-11-
<PAGE> 12
claim, the Executive shall cooperate with the Company in so
contesting; provided, however, that the Company shall bear and pay
-----------------
all costs and expenses (including additional interest and
penalties) incurred in connection with such contest, on an
after-tax basis to the Executive.
4.3 DEATH. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period (either prior or
subsequent to a Triggering Transaction), this Agreement shall terminate
without further obligations to the Executive's legal representatives under
this Agreement, other than for (i) payment of Accrued Obligations (as defined
in Section 4.1(a)) (which shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within thirty (30) days of
the Date of Termination) and (ii) the timely payment or provision of Other
Benefits (as defined in Section 4.1(c)), including death benefits pursuant to
the terms of any plan, policy, or arrangement of the Company.
4.4 DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period (either
prior or subsequent to a Triggering Transaction), this Agreement shall
terminate without further obligations to the Executive, other than for
(i) payment of Accrued Obligations (as defined in Section 4.1(a)) (which
shall be paid to the Executive in a lump sum in cash within thirty (30) days
of the Date of Termination) and (ii) the timely payment or provision of Other
Benefits (as defined in Section 4.1(c)) including Disability benefits
pursuant to the terms of any plan, policy or arrangement of the Company.
4.5 TERMINATION FOR CAUSE; OTHER THAN GOOD REASON. If the
Executive's employment shall be terminated for Cause during the Employment
Period (either prior or subsequent to a Triggering Transaction), this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive his Accrued Compensation (as
defined in this Section). If the Executive terminates employment with the
Company during the Employment Period (excluding a termination for Good
Reason), this Agreement shall terminate without further obligations to the
Executive, other than for the payment of Accrued Compensation (as defined in
this Section) and the timely payment or provision of Other Benefits (as
defined in Section 4.1(c)). In such case, all Accrued Compensation shall be
paid to the Executive in a lump sum in cash within thirty (30) days of the
Date of Termination.
For the purpose of this Section, the term "Accrued Compensation"
means the sum of (i) the Executive's Annual Base Salary through the Date of
Termination to the extent not previously paid, (ii) any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon), and (iii) any accrued vacation pay in each case to the
extent not previously paid.
4.6 NON-EXCLUSIVITY OF RIGHTS; SUPERSESSION OF CERTAIN BENEFITS.
Except as provided in this Section 4.6, nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
plan, program, policy or practice provided by the Company and for which the
Executive may qualify, nor shall anything herein limit or otherwise affect
such rights as the Executive may have under any contract or agreement with
the Company, except for the elimination of penalties for competing as
provided in Section 4.2(e). Amounts which are vested benefits of which the
Executive is otherwise entitled to receive under any plan, policy, practice
or program of, or any contract or agreement with, the Company at or
subsequent to the Date of Termination, shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
-12-
<PAGE> 13
4.7 FULL SETTLEMENT. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
the Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and
such amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay promptly as incurred, to the full
extent permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive regarding the amount of any payment pursuant to this Agreement),
plus in each case interest on any delayed payment at the applicable Federal
rate provided for in Code Section 7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If there shall be any dispute between
the Company and the Executive (i) in the event of any termination of the
Executive's employment by the Company, whether such termination was for
Cause, or (ii) in the event of any termination of employment by the
Executive, whether Good Reason existed, then, unless and until there is a
final, nonappealable judgment by a court of competent jurisdiction declaring
that such termination was for Cause or that the determination by the
Executive of the existence of Good Reason was not made in good faith, the
Company shall pay all amounts, and provide all benefits, to the Executive
and/or the Executive's family or other beneficiaries, as the case may be,
that the Company would be required to pay or provide pursuant to Section 4.1
or 4.2 as though such termination were by the Company without Cause or by the
Executive with Good Reason; provided, however, that the Company shall not be
-----------------
required to pay any disputed amounts pursuant to this Section except upon
receipt of an undertaking by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudged by such court not to be
entitled.
SECTION 5: NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) It is agreed that during the period beginning on the
date the Term of this Agreement expires and ending one (1) year
thereafter, the Executive shall not, without prior written approval
of the Board, become an officer, employee, agent, partner or
director of any business enterprise in substantial direct
competition (as defined in Section 5.1(b)) with the Company;
provided that, if the Executive is terminated by the Company
without Cause or if the Executive terminates his employment for
Good Reason, then he will not be subject to the restrictions of
this Section.
5.1(b) For purposes of Section 5.1, a business enterprise
with which the Executive becomes associated as an officer,
employee, agent, partner or director shall be considered in
substantial direct competition, if such entity competes with the
Operating Line of Business and is within the Company's market area
as of the date that the Employment Period expires.
5.1(c) The above constraint shall not prevent the Executive
from making passive investments, not to exceed five percent (5%),
in any enterprise.
-13-
<PAGE> 14
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company
and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process, communicate
or divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation
of the provisions of this Section constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.
SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal to the
Executive and, without the prior written consent of the Company, the rights
(but not the obligations) shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. Failure of the Company to obtain
such agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to terminate the
Agreement at his option on or after the Triggering Transaction Date for Good
Reason. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or
otherwise.
SECTION 7: MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to time in the
future, provide other incentive programs and bonus arrangements to the
Executive with respect to the occurrence of a Triggering Event that will be
in addition to the benefits required to be paid in the designated
circumstances in connection with the occurrence of a Triggering Transaction.
Such additional incentive programs and/or bonus arrangements will affect or
abrogate the benefits to be paid under this Agreement only in the manner and
to the extent explicitly agreed to by the Executive in any such subsequent
program or arrangement.
7.2 NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses as set forth below; provided that all notices to the
Company shall be directed to the attention of the Chairman of the Board, or
to such other address as one party may have furnished to the other in writing
in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
-14-
<PAGE> 15
Notice to Executive:
-------------------
Michael E. Burnham
176 Lake Lorraine Drive
Belleville, IL 62221
Notice to Company:
-----------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, MO 63017-3406
7.3 VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
7.4 WITHHOLDING. The Company may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
7.5 WAIVER. The Executive's or the Company's failure to insist
upon strict compliance with any provision hereof or any other provision of
this Agreement or the failure to assert any right the Executive or the
Company may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to Section 3.4
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
IN WITNESS WHEREOF, the Executive and, the Company, pursuant to the
authorization from its Board, have caused this Agreement to be executed in
its name on its behalf, all as of the day and year first above written.
/s/ Michael E. Burnham
---------------------------------------
Michael E. Burnham
ANGELICA CORPORATION
By /s/ L. J. Young
-------------------------------------
Name: L. J. Young
----------------------------------
Title: Chairman and President
---------------------------------
-15-
<PAGE> 1
AMENDMENT
TO
ANGELICA CORPORATION
SUPPLEMENTAL PLAN
The Angelica Corporation Supplemental Plan (the "Plan") hereby is
amended, effective as of February 1, 1997, in the following
particulars.
1. Section 4(a) of the Plan is amended to read as follows:
"(a) The amount payable annually to a Participant who
has at least 30 years of service with the Company
when he ceases to be an Employee will be an amount
(called the "formula amount"), established by the
Board at the time the Participant joins the Plan
and not subject to decrease except as set out in
subsection (d) (though subject to increase in the
discretion of the Board), between 30 and 50 percent
of the Participant's final average compensation
(the "Supplemental Annual Benefit"). The
Supplemental Annual Benefit shall be decreased by
the annual amount payable for the payment period
specified in Section 6(a) or (b) (when expressed as
a life annuity which is the actuarial equivalent of
the amount payable) to him by the Company then or
thereafter under any other retirement or deferred
compensation plan or contract, including amounts
payable under the Angelica Corporation Pension Plan
or under the Company's predecessor Deferred Income
Sharing Plan and, if appropriate, the related
Consulting and Advisory Contracts, but excluding
all amounts payable under the Angelica Corporation
Deferred Compensation Option Plan for Selected
Management Employees and the Angelica Corporation
Retirement Savings Plan. Anything contained herein
to the contrary notwithstanding, the formula amount
with respect to a Participant whose employment
terminates with the Company, is reemployed with the
Company and who again becomes a Participant in the
Plan before any benefit to which he is entitled
under the Plan is paid to him, shall be the formula
amount established by the Board at the time the
Participant subsequently becomes a Participant in
the Plan."
2. Section 4(c) of the Plan is amended to read as follows:
"For purposes of this Plan, a Participant's service with
the Company shall mean the aggregate period of the
Participant's continuous uninterrupted employment with
the Company and all subsidiaries (including those whose
business activities are conducted principally outside the
United States of America) immediately prior to the date
the determination of his service is being made,
disregarding all previous periods of discontinuous
service (if any). Periods of uninterrupted service will
not be considered to be discontinuous if the interruption was
<PAGE> 2
because of leave of absence granted by the Company,
military duty or other governmental service, or temporary
physical or mental incapacity. Ordinarily no service
after the Participant reaches age 65 will be taken into
account; however, in specific cases the Board may
authorize the crediting of up to an additional three
years of service beyond such age. In the case of a
Participant who was employed by an enterprise which was
acquired by the Company, each full year of service prior
to the acquisition date will be considered one-half year
of service with the Company for purposes of this Plan,
and fractional years shall be disregarded.
Notwithstanding the terms of this subsection (c), to
determine the service of a Participant whose employment
terminates with the Company, is reemployed with the
Company and who again becomes a Participant in the Plan
before any benefit to which he is entitled under the Plan
is paid to him, such Participant's service shall be the
sum of his prior aggregate period of continuous
uninterrupted employment with the Company and all
subsidiaries as specified above and any subsequent period
of continuous uninterrupted employment with the Company
and all subsidiaries as determined hereunder."
IN WITNESS WHEREOF, the Company has caused this amendment to be
executed by its duly authorized officer this 25th day of
February, 1997.
ANGELICA CORPORATION
By /s/ L. J. Young
------------------------------------------
Chairman of the Board,
President and Chief Executive Officer
- 2 -
<PAGE> 1
AMENDMENT TO
ANGELICA CORPORATION
DEFERRED COMPENSATION OPTION PLAN
FOR SELECTED MANAGEMENT EMPLOYEES
The Deferred Compensation Option Plan for Selected Management
Employees (the "Plan") is amended, effective as of February 1,
1997, in the following particulars:
I.
Section 2.1(x)(ii) of the Plan is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"(ii) As to benefits attributable to Deferrals made
on or after January 1, 1986, the percentage (not to
exceed one-hundred percent (100%)) determined by
dividing (A) the number of full and fractional
years elapsed from the effective date of the
Participant's Deferred Compensation Agreement to
the date of determination, by (B) the number of
full and fractional years from the effective date
of the Participant's initial Deferred Compensation
Agreement to the Participant's Normal Retirement
Date; provided that, no Participant shall be vested
before he or she completes five (5) years of
continuous service as an Employee. Anything
contained herein to the contrary notwithstanding,
to determine the number of full and fractional
years calculated in (A) above with respect to a
Participant whose employment terminates with the
Company, is reemployed with the Company and who
again becomes an Active Participant in the Plan
before any payment of his benefit to which he is
entitled under the Plan is paid to him, only the
number of full and fractional years during which
the such Participant is an Employee shall be
counted."
II.
Section 3.3 of the Plan is hereby deleted in its entirety and
the following is substituted in lieu thereof:
"3.3 Participation.
------------------
An Employee shall become an Active Participant as of the
date on which his or her Deferred Compensation Agreement
becomes effective."
<PAGE> 2
IN WITNESS WHEREOF, the Parent Company has caused this Plan to
be amended by signature of its duly authorized officer this 25th
day of February, 1997.
ANGELICA CORPORATION
By /s/ L. J. Young
-------------------------------------
Chairman of the Board
-2-
<PAGE> 1
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A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S 17
- ------------------------------------------------------------------------------
Financial Review
- ------------------------------------------------------------------------------
Financial Condition
The Company's financial condition at the end of fiscal 1997 continued
to be very strong. New short-term debt at year end caused working capital of
$163.0 million and a current ratio of 3.3 to 1 to be moderately lower than
working capital of $181.0 and a current ratio of 5.0 to 1 at the end of the
prior year, but all of these financial measures reflected strength. Current
assets increased $5.8 million during the year, with the largest changes being
increases of $7.4 million in inventories and $7.2 million in linens in
service, due in part to acquisitions. These increases were offset by an $8.9
million decrease in cash and short-term investments. Receivables were down
slightly in the year, and receivable days outstanding decreased to 61 versus
63 at the end of last year. Current liabilities increased $23.9 million from
last year end, $15.4 million of which represented the new short-term debt.
Long-term debt decreased $2.7 million in fiscal 1997 as a result of
normal sinking fund payments. The ratio of long-term debt to total long-term
debt and equity was 34.0 percent at year end compared with 34.6 percent last
year. Had the short-term debt at year end been treated as long term for
purposes of this ratio, it still would have been a modest 37.3 percent.
Cash flow from operating activities was $17.4 million in fiscal 1997,
down from $27.1 million in the prior year due to lower net income when
compared with last year's net income plus last year's restructuring charge.
Cash used in investing activities increased to $30.8 million compared with
$19.4 million a year ago. Included in investing activities, capital
expenditures increased to $23.6 million from $8.8 million (caused by
expenditures on three new laundry facilities to replace existing facilities),
and acquisition expenditures decreased to $7.2 million from $10.6 million in
the prior year. Cash flow provided by financing activities was a net $4.4
million this year, with $15.4 million in new short-term financing being
offset by long-term debt repayments and $8.8 million of dividends paid.
No material change in the Company's future aggregate cash requirements
is foreseen at the present time. In addition, it is Management's opinion that
the Company's financial condition is such that internal and external
resources are sufficient to satisfy the Company's future requirements for
capital expenditures, dividends and working capital.
Analysis of Fiscal 1997 Operations Compared to 1996
Combined sales and textile service revenues were $489.2 million in
fiscal 1997, an increase of $2.2 million over the prior year. Excluding
acquisitions, there would have been a decline of 2.9 percent. For the Textile
Services segment, revenues increased by $6.5 million or 2.5 percent, with all
the increase resulting from acquisitions. Sales of the Manufacturing and
Marketing segment, before deduction for intersegment sales, were $4.2 million
or 2.3 percent lower than the prior year. Without the effect of acquisitions,
sales would have been 4.0 percent lower than the prior year. Sales of Life
Retail Stores rose $6.1 million or 8.4 percent in fiscal 1997 due to
acquisitions and a 4.0 percent same-store sales increase.
The gross profit percent to combined sales and textile service revenues
in fiscal 1997 was 25.6 percent, down from 26.2 percent in the prior year.
Gross margins in the Textile Services segment were down due to continued
margin pressures in the health care markets and significantly increased linen
amortization expense, which has been adversely affected by health care
customers resisting the industry practice of paying for lost and misused
linens. The inability to collect loss charges increases linen amortization
expense and reduces gross margin. Margins of the Manufacturing and Marketing
segment rose slightly, primarily the result of a change in sales mix, and
margins of Life Retail Stores remained approximately the same as the prior
year.
Selling, general and administrative expenses in fiscal 1997 were only
$0.7 million or 0.7 percent higher than the prior year and remained the same
percent to combined sales and textile services revenues. Interest expense of
- ------------------------------------------------------------------------------
<PAGE> 2
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18 A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
$9.6 million in fiscal 1997 compared with $9.1 million in the prior year,
reflecting the new short-term financing. The effective tax rate in fiscal
1997 was 38.0 percent, slightly lower than an effective tax rate of 38.5
percent in the preceding year.
Analysis of Fiscal 1996 Operations Compared to 1995
In fiscal 1996, combined sales and textile service revenues of $487.0
million were $14.2 million or 3.0 percent higher than last year. Excluding
acquisitions, there would have been a decline of 1.6 percent. In the Textile
Services segment, revenues were up $10.4 million or 4.3 percent, with all of
this increase coming from acquisitions. Sales of the Manufacturing and
Marketing segment, before deduction for intersegment sales, were $2.3 million
or 1.3 percent higher than the prior year. Without the effect of
acquisitions, sales would have been 3.7 percent lower than the prior year.
Increased sales volume in the United States and in the United Kingdom offset a
small sales decline in Canada. Life Retail Stores sales rose $2.9 million or
4.3 percent due to acquisitions and a 2.9 percent same-store sales increase.
The gross profit percent to combined sales and rental service revenues
was 26.2 percent in fiscal 1996, down slightly from 26.8 percent in the prior
year. In the Textile Services segment, margins were lower than the prior year
due to continued pressure on margins in the health care market, plus the loss
of a large non-health care customer at the Las Vegas plant and the inability
to lower costs there sufficiently to compensate for the lost revenue. Margins
of the Manufacturing and Marketing segment were up slightly versus last year,
primarily the result of a change in sales mix.
Selling, general and administrative expenses in fiscal 1996 were $4.9
million or 5.2 percent higher than the prior year and increased slightly as a
percentage of combined sales and rental service revenues to 20.4 percent from
20.0 percent the prior year. Interest expense of $9.1 million in fiscal 1996
was $1.2 million higher than the prior year due to the long-term financing
completed in fiscal 1996. The effective tax rate was 38.5 percent in fiscal
1996, unchanged from the preceding year.
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<PAGE> 3
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A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S 19
- ------------------------------------------------------------------------------
<TABLE>
Consolidated Statements of Income
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
For Years Ended January 25, January 27, January 28,
(Dollars in thousands, except per share amounts) 1997 1996 1995
............................................................................................................
<S> <C> <C> <C>
Textile service revenues $261,349 $254,893 $244,496
Net sales 227,870 232,121 228,336
............................................................................................................
Combined sales and textile service revenues 489,219 487,014 472,832
............................................................................................................
Cost of textile services 215,809 205,486 193,219
Cost of goods sold 148,127 154,054 152,790
............................................................................................................
363,936 359,540 346,009
............................................................................................................
Gross profit 125,283 127,474 126,823
Selling, general and administrative expenses 100,216 99,481 94,585
Restructuring charge -- 14,145 --
............................................................................................................
Income from operations 25,067 13,848 32,238
Interest expense (9,588) (9,104) (7,906)
Other expense, net (2,541) (2,889) (3,078)
............................................................................................................
Income before income taxes 12,938 1,855 21,254
Provision for income taxes 4,916 714 8,183
............................................................................................................
Net income $ 8,022 $ 1,141 $ 13,071
============================================================================================================
Net income per share $ .88 $ .13 $ 1.44
============================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
- ------------------------------------------------------------------------------
<PAGE> 4
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20 A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S
- ------------------------------------------------------------------------------
<TABLE>
Consolidated Balance Sheets
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
January 25, January 27,
(Dollars in thousands) 1997 1996
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets:
Cash and short-term investments $ 2,122 $ 11,029
Receivables, less reserves of $2,645 and $2,687 66,632 67,164
Inventories 111,456 104,057
Linens in service 47,544 40,295
Prepaid expenses 4,658 4,036
............................................................................................................
Total Current Assets 232,412 226,581
............................................................................................................
Property and Equipment:
Land 5,149 4,973
Buildings and leasehold improvements 75,466 64,513
Machinery and equipment 134,429 122,672
Capitalized leased property 1,849 1,849
............................................................................................................
216,893 194,007
Less--reserve for depreciation 114,063 103,213
............................................................................................................
102,830 90,794
............................................................................................................
Other:
Goodwill 7,951 8,384
Other acquired assets 8,814 9,714
Cash surrender value of life insurance 14,455 12,595
Miscellaneous 7,642 5,159
............................................................................................................
38,862 35,852
............................................................................................................
Total Assets $374,104 $353,227
============================================================================================================
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term debt $ 15,400 $ --
Current maturities of long-term debt 2,689 2,681
Accounts payable 21,551 17,238
Accrued wages and other compensation 8,444 7,772
Other accrued liabilities 19,893 17,530
Income taxes 1,420 317
............................................................................................................
Total Current Liabilities 69,397 45,538
............................................................................................................
Long-Term Debt, less current maturities 97,417 100,103
............................................................................................................
Other:
Deferred compensation and other payments 14,137 14,643
Deferred income taxes 3,912 3,413
............................................................................................................
18,049 18,056
............................................................................................................
Shareholders' Equity:
Common Stock, $1 par value, authorized 20,000,000 shares, issued:
9,471,538 shares 9,472 9,472
Capital surplus 4,196 4,196
Retained earnings 186,438 187,328
Translation adjustment (1,763) (2,439)
Common Stock in treasury, at cost: 340,699 and 330,030 shares (9,102) (9,027)
............................................................................................................
189,241 189,530
............................................................................................................
Total Liabilities and Shareholders' Equity $374,104 $353,227
============================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
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<PAGE> 5
- ------------------------------------------------------------------------------
A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S 21
- ------------------------------------------------------------------------------
<TABLE>
Consolidated Statements of Shareholders' Equity
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
For Years Ended January 25, January 27, January 28,
(Dollars in thousands) 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock ($1 par value)
Balance beginning of year $ 9,472 $ 9,471 $ 9,448
Exercise of stock options -- 1 23
............................................................................................................
Balance end of year $ 9,472 $ 9,472 $ 9,471
............................................................................................................
Capital Surplus
Balance beginning of year $ 4,196 $ 4,179 $ 3,672
Exercise of stock options -- 30 507
Redemption of preferred stock -- (13) --
............................................................................................................
Balance end of year $ 4,196 $ 4,196 $ 4,179
............................................................................................................
Retained Earnings
Balance beginning of year $187,328 $194,849 $190,301
Net income 8,022 1,141 13,071
Cash dividends (8,780) (8,683) (8,557)
Exercise of stock options/stock awards (132) 21 34
............................................................................................................
Balance end of year $186,438 $187,328 $194,849
............................................................................................................
Translation Adjustment
Balance beginning of year $ (2,439) $ (2,290) $ (1,658)
Change in cumulative adjustment 676 (149) (632)
............................................................................................................
Balance end of year $ (1,763) $ (2,439) $ (2,290)
............................................................................................................
Common Stock in Treasury, at cost
Balance beginning of year $ (9,027) $ (9,549) $ (9,770)
Treasury stock purchased (671) -- --
Exercise of stock options/stock awards 631 541 221
Other changes during year (35) (19) --
............................................................................................................
Balance end of year $ (9,102) $ (9,027) $ (9,549)
............................................................................................................
Shareholders' Equity, end of year $189,241 $189,530 $196,660
============================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
- ------------------------------------------------------------------------------
<PAGE> 6
- ------------------------------------------------------------------------------
22 A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S
- ------------------------------------------------------------------------------
<TABLE>
Consolidated Statements of Cash Flows
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
For Years Ended January 25, January 27, January 28,
(Dollars in thousands) 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income $ 8,022 $ 1,141 $ 13,071
Non-cash items included in net income:
Depreciation 13,415 13,797 13,297
Amortization of acquisition costs 3,460 3,997 3,586
Restructuring charge -- 14,145 --
Change in working capital components,
net of businesses acquired:
Receivables, net 629 4,232 312
Inventories and linens in service (11,326) (3,845) (3,192)
Prepaid expenses (468) 1,294 (880)
Accounts payable 4,305 (2,927) 483
Compensation and other accruals 3,035 2,488 2,713
Income taxes payable 1,103 (4,966) (247)
Cash surrender value of life insurance (1,860) (1,678) (1,508)
Other, net (2,870) (619) (37)
............................................................................................................
Net cash flow provided by operating activities 17,445 27,059 27,598
............................................................................................................
Cash Flows from Investing Activities
Expenditures for property and equipment, net (23,603) (8,760) (11,466)
Cost of businesses acquired (7,160) (10,643) (16,165)
............................................................................................................
Net cash flow used in investing activities (30,763) (19,403) (27,631)
............................................................................................................
Cash Flows from Financing Activities
Proceeds from issuance of short-term debt 15,400 -- 11,200
Proceeds from issuance of long-term debt -- 30,000 --
Debt assumed in acquisition -- 3,131 --
Long-term and short-term debt repayments (2,678) (23,698) (2,572)
Dividends paid (8,780) (8,683) (8,557)
Other, net 469 412 153
............................................................................................................
Net cash flow provided by financing activities 4,411 1,162 224
............................................................................................................
Net increase (decrease) in cash and short-term investments (8,907) 8,818 191
Cash and short-term investments at beginning of year 11,029 2,211 2,020
............................................................................................................
Cash and short-term investments at end of year $ 2,122 $ 11,029 $ 2,211
============================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
- ------------------------------------------------------------------------------
<PAGE> 7
- ------------------------------------------------------------------------------
A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S 23
- ------------------------------------------------------------------------------
Notes to Consolidated Financial Statements
- ------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies
Nature of Operations
The Company provides textile rental and laundry services principally to
health care institutions and to a limited extent to hotels, casinos, motels
and restaurants, in or near major metropolitan areas in the United States.
The Company is a manufacturer and marketer of uniforms and business career
apparel for a wide variety of institutions and businesses in the United
States, Canada and the United Kingdom. The Company operates a nationwide
chain of specialty retail stores primarily for nurses and other health care
professionals.
Principles of Consolidation
All subsidiaries are wholly-owned and are included in the consolidated
financial statements. All significant intercompany accounts and transactions
have been eliminated.
Textile service revenues are recognized at the time the service is
provided to the customer. Net sales are recognized at the time the
merchandise is shipped to or picked up by the customer.
Certain amounts in prior years have been reclassified to conform to
current year presentation.
Use of Estimates
These financial statements have been prepared on the accrual basis of
accounting, which required the use of certain estimates by Management in
determining the Company's assets, liabilities, revenue and expenses.
Foreign Currency Translation
The Company accounts for foreign currency translation in accordance with
Statement of Financial Accounting Standards (SFAS) No. 52. The cumulative
effect of this method is reflected as a separate component of shareholders'
equity.
Inventories
Inventories are stated at the lower of cost (first-in, first-out basis) or
market. Cost includes material, labor and factory overhead, as applicable.
Inventories were comprised of the following:
<TABLE>
<CAPTION>
(Dollars in thousands) 1997 1996
- ------------------------------------------------------------
<S> <C> <C>
Raw materials $ 30,961 $ 27,612
Work in process 6,366 6,033
Finished goods 74,129 70,412
............................................................
$111,456 $104,057
============================================================
</TABLE>
Linens in Service
Linens in service are stated at depreciated cost, not in excess of market.
Property and Equipment
Property and equipment are stated at cost. Renewals and betterments are
capitalized.
Property and equipment are depreciated over their expected useful lives
(buildings -- 15 to 40 years; machinery and equipment -- three to 10 years).
Depreciation is computed principally on the straight-line method. Leasehold
improvements are amortized using the straight-line method over their useful
lives or lease terms, as appropriate.
Goodwill and Other Acquired Assets
Goodwill, the excess of cost over net assets of businesses acquired, is being
amortized on the straight-line basis over periods not exceeding 40 years.
Other acquired assets, including customer contracts and non-competition
agreements, are being amortized on the straight-line basis generally over
periods of three to seven years.
Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109, which
utilizes the liability method. Under this method, deferred taxes are
determined based on the estimated future tax effects of differences between
the financial statement and tax bases of assets and liabilities given the
provisions of the enacted tax laws.
Net Income Per Share
Net income per share is computed by dividing the net income applicable to
Common Stock by the weighted average number of Common and Common equivalent
shares outstanding.
Consolidated Statements of Cash Flows
For purposes of the Consolidated Statements of Cash Flows, the Company
considers short-term, highly liquid investments (securities with an original
maturity date of less than three months), as cash equivalents.
Cash payments for income taxes were $2,826,000, $5,615,000 and
$9,182,000 in 1997, 1996 and 1995, respectively; and in these periods
interest payments were $9,627,000, $8,644,000 and $7,844,000, respectively.
Adoption of New Pronouncements
Effective January 28, 1996, the Company adopted SFAS No. 121 "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" with no impact on the consolidated financial statements.
<PAGE> 8
- ------------------------------------------------------------------------------
24 A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S
- ------------------------------------------------------------------------------
2. Retirement Benefits
The Company has a non-contributory defined benefit pension plan covering
primarily all domestic salaried and hourly administrative non-union
personnel. The benefit formula is based on years of service and compensation
during employment. The funding policy of the pension plan is in accordance
with the requirements of the Employee Retirement Income Security Act of 1974.
Pension expense included the following components:
<TABLE>
<CAPTION>
(Dollars in thousands) 1997 1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost (benefits
earned during the year) $ 697 $ 536 $ 615
Interest cost on projected
benefit obligation 1,050 1,034 981
(Increase) decrease in
value of assets (1,681) (3,089) 235
Net amortization and
deferrals 676 2,106 (1,010)
..............................................................................
Net pension expense $ 742 $ 587 $ 821
==============================================================================
</TABLE>
The funded status of the plan and the net pension liability at January
1, 1997 and January 1, 1996 were as follows:
<TABLE>
<CAPTION>
January 1, January 1,
(Dollars in thousands) 1997 1996
- ------------------------------------------------------------------
<S> <C> <C>
Actuarial present value
of benefit obligation:
Vested benefits $(14,459) $(13,628)
Nonvested benefits (158) (113)
..................................................................
Accumulated benefit obligation (14,617) (13,741)
Effect of projected future
compensation levels (2,115) (1,716)
..................................................................
Projected benefit obligation (16,732) (15,457)
Plan assets at fair value,
primarily listed stocks
and Government securities 16,844 15,699
..................................................................
Plan assets more than projected
benefit obligation 112 242
Unrecognized obligation at transition 1,184 1,318
Unrecognized net gains (2,948) (2,886)
Unrecognized prior service cost 230 250
..................................................................
Net pension liability $ (1,422) $ (1,076)
==================================================================
</TABLE>
In determining the projected benefit obligation, the following
actuarial assumptions were used:
<TABLE>
<CAPTION>
1997 1996
- ------------------------------------------------------------------
<S> <C> <C>
Discount rate 7.25% 7.00%
Compensation increase rate 6.00% 6.00%
Long-term rate of return 8.50% 8.50%
- ------------------------------------------------------------------
</TABLE>
The Company does not provide retirees with post-retirement benefits
other than pensions.
3. Short-Term and Long-Term Debt
The following table summarizes information with respect to short-term debt
for 1997 and 1996:
<TABLE>
<CAPTION>
(Dollars in thousands) 1997 1996
- ------------------------------------------------------------------
<S> <C> <C>
Average amount of short-term
debt during the year $5,717 $4,392
Weighted average interest rate:
During the year 5.57% 5.32%
At year end 5.42% --
- ------------------------------------------------------------------
</TABLE>
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
(Dollars in thousands) 1997 1996
- ------------------------------------------------------------------
<S> <C> <C>
10.2% notes to insurance company,
due annually to 2004 $ 39,375 $ 41,375
9.15% notes to insurance
companies, due 2001 25,000 25,000
8.225% notes to insurance
companies, due 2006 30,000 30,000
6.84% note to bank, due
quarterly to 1999 2,977 3,100
76% of prime rate industrial
development revenue bond,
due quarterly to 2000 1,687 2,138
Other long-term debt including
obligations under capital leases 1,067 1,171
..................................................................
100,106 102,784
Less--current maturities 2,689 2,681
..................................................................
$ 97,417 $100,103
==================================================================
</TABLE>
The most restrictive of the Company's loan agreements require that the
Company maintain a minimum of $160,000,000 in consolidated tangible net
worth, as defined. As of January 25, 1997, the balance was $181,200,000.
Aggregate maturities of long-term debt for each of the four years
subsequent to January 31, 1998, are $2,686,000, $5,224,000, $2,415,000 and
$27,223,000, respectively.
Based on borrowing rates currently available for debt instruments with
similar terms and average maturities, the fair market value of the Company's
long-term debt, as of January 25, 1997 and January 27, 1996, was
approximately $110,260,000 and $119,550,000, respectively.
- ------------------------------------------------------------------------------
<PAGE> 9
- ------------------------------------------------------------------------------
A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S 25
- ------------------------------------------------------------------------------
4. Income Taxes
The provision for income taxes consisted of the following:
<TABLE>
<CAPTION>
(Dollars in thousands) 1997 1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $2,168 $4,045 $6,134
State 551 155 1,023
Foreign 240 (322) 200
Deferred 1,957 (3,164) 826
..............................................................................
$4,916 $ 714 $8,183
==============================================================================
</TABLE>
Reconciliation between the statutory income tax rate and effective tax
rate is summarized below:
<TABLE>
<CAPTION>
1997 1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory rate 35.0% 35.0% 35.0%
State tax, net of
Federal benefit 3.2 3.4 3.5
Other, net (.2) .1 --
..............................................................................
38.0% 38.5% 38.5%
==============================================================================
</TABLE>
The tax effect of significant temporary differences representing
deferred tax assets and liabilities were as follows:
<TABLE>
<CAPTION>
January 25, January 27,
(Dollars in thousands) 1997 1996
- ------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Deferred compensation $ 4,508 $ 5,178
Insurance reserves not
yet deductible 4,580 4,060
Customer contracts 3,340 3,222
Other 2,699 4,062
..................................................................
15,127 16,522
..................................................................
Deferred tax liabilities:
Depreciation (9,257) (9,507)
Linen amortization (12,340) (11,807)
Other (901) (622)
..................................................................
(22,498) (21,936)
..................................................................
Net deferred tax liabilities $ (7,371) $ (5,414)
==================================================================
</TABLE>
Temporary differences related to investments in foreign subsidiaries
essentially permanent in nature and not expected to reverse in the
foreseeable future were approximately $2,313,000. The unrecognized deferred
tax liability related to these temporary differences was $253,000.
5. Preferred Stock
The Company has two classes of authorized Preferred Stock: Class A, Series 1,
$1 stated value per share, authorized in the amount of 100,000 shares; and
Class B, authorized in the amount of 2,500,000 shares. At January 25, 1997 no
shares of Class A or Class B were outstanding.
6. Shareholder Protection Rights Plan
The Company has a Shareholder Protection Rights Plan, under which a Right is
attached to each share of the Company's Common Stock. The Rights may only
become exercisable under certain circumstances involving actual or potential
acquisitions of the Company's Common Stock by a person or group of affiliated
or associated persons. Depending upon the circumstances, if the Rights become
exercisable, the holder may be entitled to purchase units of the Company's
Class B Series 1 Junior Participating Preferred Stock, shares of the
Company's Common Stock or shares of common stock of the surviving or
purchasing company. The Rights will remain in existence until September 7,
1998, unless they are earlier exercised or redeemed.
7. Restructuring Charge
During the fourth quarter of fiscal 1996, the Company recorded a
restructuring charge of $14,145,000 ($8,700,000 after-tax or $.95 per share).
The restructuring charge related primarily to the consolidation and closing
of Textile Service plants, the reduction of selected product lines in the
Manufacturing and Marketing segment and the sale or contraction of certain
Canadian operations. These costs included (i) writedowns to the carrying
values of plants closed, idle facilities and other assets, (ii) related
inventory adjustments and (iii) the accrual of severance costs associated
with the elimination of approximately 450 positions.
The restructuring charge was composed of $2,566,000 in cash
expenditures and $11,579,000 in reduction of asset carrying values. As of
January 25, 1997, $13,286,000 had been charged to the restructuring reserve
and the remaining reserve of $859,000 is expected to be utilized during
fiscal 1998.
8. Stock-Based Compensation Plans
The Company has various stock option and stock bonus plans which provide for
the granting to certain employees and directors of incentive stock options,
non-qualified stock options, restricted stock and performance awards. Options
and awards have been granted at the fair market value at the date of grant,
although certain plans allow for options to be granted at an option price
below fair market value. Options are exercisable not less than six months nor
more than 10 years after the date of grant.
- ------------------------------------------------------------------------------
<PAGE> 10
- ------------------------------------------------------------------------------
26 A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S
- ------------------------------------------------------------------------------
The Company applies APB Opinion No. 25, Accounting for Stock Issued to
Employees, in accounting for its plans. Accordingly, no compensation expense
has been recognized for its stock-based compensation plans other than for
restricted stock and performance-based awards.
A summary of the status of the Company's stock option plans for fiscal
years 1997, 1996 and 1995 and changes during the years then ended is
presented in the table below:
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996 1995
------------------- ------------------- -------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 488,125 $30.45 399,331 $31.72 450,696 $31.15
Granted 221,250 19.82 103,250 25.35 -- --
Exercised -- -- (1,000) 22.81 (26,459) 23.10
Lapsed/Canceled (37,200) 31.05 (13,456) 29.82 (24,906) 30.53
..................................................................................................................
Outstanding at end of year 672,175 $26.91 488,125 $30.45 399,331 $31.72
..................................................................................................................
Options exercisable at year end 324,255 $31.85 243,770 $32.32 197,321 $32.25
..................................................................................................................
Options available for future grant 452,627 648,088 524,425
..................................................................................................................
Weighted average fair value for each
option granted during the year $5.00 $7.59
==================================================================================================================
</TABLE>
The fair value of each option granted is estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions
used for grants in fiscal 1997 and 1996, respectively: risk free interest
rates of 6.4% and 7.2%; expected dividend yields of 3.5% and 3.3%;
volatilities of 18.5% and 17.1%; and expected lives of 9 years in both
periods. The range of per share exercise prices for the 672,175 options
outstanding at year end was $19.00 to $37.50, and the weighted-average
remaining contractual life was 7.6 years.
Had compensation expense for the Company's 1997 and 1996 grants for
stock-based compensation plans been determined consistent with SFAS No. 123,
Accounting for Stock-Based Compensation, the Company's net income and
earnings per share would approximate the pro forma amounts below:
<TABLE>
<CAPTION>
(Dollars in thousands, except per share) 1997 1996
- ------------------------------------------------------------------
<S> <C> <C>
Net income - As reported $8,022 $1,141
Pro forma 7,746 1,035
..................................................................
Earnings per share - As reported $ .88 $ .13
Pro forma .85 .11
==================================================================
</TABLE>
SFAS No. 123 does not apply to awards prior to 1996, nor are the
effects of its application in this disclosure indicative
of the pro forma effect on net income in future years.
9. Commitments and Contingencies
Future minimum payments by year and in the aggregate, under capital leases
and under operating leases with initial or remaining terms of one year or
more, consisted of the following at January 25, 1997:
<TABLE>
<CAPTION>
Capital Operating
(Dollars in thousands) Leases Leases
- ------------------------------------------------------------------
<S> <C> <C>
1998 $ 49 $ 8,511
1999 36 7,235
2000 25 5,855
2001 20 4,772
2002 20 3,720
Later years 85 12,461
..................................................................
Total minimum lease payments 235 $42,554
..................................................................
Amount representing interest 105
..................................................................
Present value of net minimum
lease payments $130
==================================================================
</TABLE>
Rental expense for all operating leases consisted of:
<TABLE>
<CAPTION>
(Dollars in thousands) 1997 1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Minimum rentals $16,528 $16,415 $14,585
Contingent rentals 374 345 341
..............................................................................
$16,902 $16,760 $14,926
==============================================================================
</TABLE>
The Company is a party to various claims and legal proceedings which
arose in the ordinary course of its business. Although the ultimate
disposition of these proceedings is not presently determinable, Management
does not believe that an adverse determination in any or all of such
proceedings will have a material adverse effect upon the financial condition
or operating results of the Company.
- ------------------------------------------------------------------------------
<PAGE> 11
- ------------------------------------------------------------------------------
A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S 27
- ------------------------------------------------------------------------------
10. Business Segment Information
The Company operates principally in three industry
segments: Textile Services, Manufacturing and Marketing
and Retail Sales. These segments, including products and principal markets,
are described elsewhere in this report.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in thousands) 1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales and textile service revenues
Textile services $261,349 $254,893 $244,496 $215,248 $218,466
Manufacturing and marketing 176,638 180,845 178,584 174,985 178,041
Retail sales 77,860 71,803 68,876 56,732 54,575
Intersegment sales (26,628) (20,527) (19,124) (19,837) (20,285)
.....................................................................................................................
$489,219 $487,014 $472,832 $427,128 $430,797
=====================================================================================================================
Earnings
Textile services $ 13,306 $ 17,069 $ 20,153 $ 19,011 $ 19,567
Manufacturing and marketing 6,015 5,728 7,003 6,962 10,150
Retail sales 7,663 6,706 6,270 4,125 4,051
Restructuring charge -- (14,145) -- -- --
Interest, corporate expenses and other, net (14,044) (13,367) (12,447) (12,183) (11,719)
Eliminations (2) (136) 275 145 204
.....................................................................................................................
$ 12,938 $ 1,855 $ 21,254 $ 18,060 $ 22,253
=====================================================================================================================
Assets (as of year end)
Textile services $182,738 $164,390 $165,499 $149,909 $144,726
Manufacturing and marketing 149,501 146,340 153,192 152,780 153,432
Retail sales 28,543 26,182 26,120 20,498 18,633
Corporate 13,322 16,315 8,737 9,674 9,866
.....................................................................................................................
$374,104 $353,227 $353,548 $332,861 $326,657
=====================================================================================================================
Depreciation
Textile services $ 7,836 $ 8,215 $ 8,032 $ 7,833 $ 7,676
Manufacturing and marketing 3,921 4,052 3,775 3,751 3,645
Retail sales 1,561 1,442 1,390 1,210 1,200
Corporate 97 88 100 78 57
.....................................................................................................................
$ 13,415 $ 13,797 $ 13,297 $ 12,872 $ 12,578
=====================================================================================================================
Capital additions, net
Textile services $ 19,014 $ 4,664 $ 6,454 $ 5,055 $ 7,800
Manufacturing and marketing 3,243 2,921 3,587 2,475 1,517
Retail sales 1,291 1,118 1,280 940 554
Corporate 55 57 145 300 28
.....................................................................................................................
$ 23,603 $ 8,760 $ 11,466 $ 8,770 $ 9,899
=====================================================================================================================
</TABLE>
Sales of foreign operations and export sales were not significant. The
Company has no one major customer. Corporate assets consist primarily of
cash, investments, cash surrender value of officers' life insurance and
office furniture and fixtures. Corporate expenses consist of the Company's
principal administrative and financial functions, which are centrally
managed. Capital additions do not include the cost of properties acquired in
business acquisitions.
- ------------------------------------------------------------------------------
<PAGE> 12
- ------------------------------------------------------------------------------
28 A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S
- ------------------------------------------------------------------------------
11. Unaudited Quarterly Financial Data
Quarterly results for 1997 and 1996 are shown below:
<TABLE>
<CAPTION>
Fiscal 1997 Quarter Ended
(Dollars in thousands, except per share amounts) April 27 July 27 October 26 January 25
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales and textile service revenues
Textile services $ 65,212 $ 65,306 $ 64,812 $ 66,019
Manufacturing and marketing 44,585 45,367 44,959 41,727
Retail sales 18,548 18,584 20,984 19,744
Intersegment sales (6,704) (6,669) (6,505) (6,750)
..................................................................................................................
121,641 122,588 124,250 120,740
..................................................................................................................
Gross profit
Textile services 13,174 11,746 10,229 10,392
Manufacturing and marketing 9,152 9,994 9,887 8,332
Retail sales 10,108 10,133 11,542 10,594
..................................................................................................................
32,434 31,873 31,658 29,318
..................................................................................................................
Net income $ 3,057 $ 2,677 $ 1,824 $ 464
==================================================================================================================
Net income per share $ .33 $ .30 $ .20 $ .05
==================================================================================================================
<CAPTION>
Fiscal 1996 Quarter Ended
(Dollars in thousands, except per share amounts) April 29 July 29 October 28 January 27
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales and textile service revenues
Textile services $ 64,904 $ 63,513 $ 63,525 $ 62,951
Manufacturing and marketing 47,102 45,890 46,114 41,739
Retail sales 16,883 17,339 19,542 18,039
Intersegment sales (5,062) (4,882) (5,586) (4,997)
..................................................................................................................
123,827 121,860 123,595 117,732
..................................................................................................................
Gross profit
Textile services 13,702 12,149 11,641 11,915
Manufacturing and marketing 10,379 10,169 9,995 8,398
Retail sales 9,214 9,311 10,799 9,802
..................................................................................................................
33,295 31,629 32,435 30,115
..................................................................................................................
Restructuring charge -- -- -- (14,145)
..................................................................................................................
Net income (loss) $ 3,438 $ 2,646 $ 2,834 $ (7,777)
==================================================================================================================
Net income (loss) per share $ .38 $ .29 $ .31 $ (.85)
==================================================================================================================
</TABLE>
- ------------------------------------------------------------------------------
<PAGE> 13
- ------------------------------------------------------------------------------
A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S 29
- ------------------------------------------------------------------------------
Report of Independent
Public Accountants
- ------------------------------------------------------------------------------
To Angelica Corporation:
We have audited the accompanying consolidated balance sheets of Angelica
Corporation (a Missouri corporation) and subsidiaries as of January 25, 1997
and January 27, 1996, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended January 25, 1997. These financial statements are the responsibility of
the Company's Management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by Management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Angelica
Corporation and subsidiaries as of January 25, 1997 and January 27, 1996, and
the results of their operations and their cash flows for each of three years
in the period ended January 25, 1997, in conformity with generally accepted
accounting principles.
/s/ Arthur Andersen LLP
St. Louis, Missouri
March 11, 1997
Common Stock Data
The Company's Common Stock is listed on the New York Stock Exchange under the
symbol AGL. The quarterly market price ranges of the Common Stock and
dividends per share paid during fiscal 1997 and fiscal 1996 were as follows:
<TABLE>
<CAPTION>
Quarter 1st 2nd 3rd 4th
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fiscal 1997
High $ 22 3/4 $ 25 1/8 $ 22 1/2 $ 20 3/4
Low 20 20 1/8 18 3/4 18 1/8
Dividend $.240 $.240 $.240 $.240
- ----------------------------------------------------------------------------
Fiscal 1996
High $ 27 1/2 $ 26 1/4 $ 25 3/8 $ 24 3/8
Low 24 3/8 24 5/8 21 7/8 19 3/8
Dividend $.235 $.235 $.240 $.240
- ----------------------------------------------------------------------------
</TABLE>
- ------------------------------------------------------------------------------
<PAGE> 14
- ------------------------------------------------------------------------------
30 A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S
- ------------------------------------------------------------------------------
<TABLE>
Financial Summary--11 Years
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
For Years Ended January 25, January 27, January 28,
(Dollars in thousands, except per share amounts) 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Combined sales and textile service revenues $489,219 $487,014 $472,832
Gross profit 125,283 127,474 126,823
Operating expenses and other, net,
excluding interest expense 102,757 102,370 97,663
Restructuring charge -- 14,145<Fa> --
Interest expense 9,588 9,104 7,906
Income before income taxes
and cumulative effect of accounting change 12,938 1,855 21,254
Provision for income taxes 4,916 714 8,183
Income before cumulative effect of accounting change 8,022 1,141 13,071
Cumulative effect of accounting change -- -- --
Net income $ 8,022 $ 1,141 $ 13,071
- -----------------------------------------------------------------------------------------------------------
Per Share Data
Net income $ .88 $ .13<Fa> $ 1.44
Cash dividends paid .96 .95 .94
Shareholders' equity $ 20.73 $ 20.73 $ 21.57
- -----------------------------------------------------------------------------------------------------------
Ratios
Current ratio (current assets to current
liabilities) 3.3 to 1 5.0 to 1 3.2 to 1
Percent long-term debt to long-term debt and equity 34.0% 34.6% 26.2%
Gross profit margin 25.6% 26.2% 26.8%
Pretax profit margin 2.6% .4% 4.5%
Effective tax rate 38.0% 38.5% 38.5%
Net income margin 1.6% .2% 2.8%
Return on average shareholders' equity 4.2% .4% 6.7%
Return on average total assets 2.2% .3% 3.8%
- -----------------------------------------------------------------------------------------------------------
Other Selected Data
Working capital $163,015 $181,043 $150,734
Additions to property and equipment, net 23,603 8,760 11,466
Depreciation expense 13,415 13,797 13,297
Long-term debt, less current maturities 97,417 100,103 69,683
Total assets $374,104 $353,277 $353,548
Average number of shares of Common Stock outstanding 9,156,861 9,139,961 9,107,262
Approximate number of employees 10,100 9,700 9,800
- -----------------------------------------------------------------------------------------------------------
<FN>
<Fa> Restructuring charge taken in fourth quarter of fiscal 1996. Effect on
net income per share is a reduction of $.95.
<Fb> Includes cumulative effect to February 1, 1992 of implementing SFAS No.
109, "Accounting for Income Taxes." Cumulative effect on net income per
share is $.21.
This information should be read in conjunction with the financial statements
and notes thereto appearing elsewhere in this report.
</TABLE>
- ------------------------------------------------------------------------------
<PAGE> 15
- ------------------------------------------------------------------------------
A N G E L I C A C O R P O R A T I O N A N D S U B S I D I A R I E S 31
- ------------------------------------------------------------------------------
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For Years Ended January 29, January 30, February 1, January 26,
(Dollars in thousands, except per share amounts) 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Combined sales and textile service revenues $427,128 $430,797 $434,471 $413,635
Gross profit 116,199 117,297 128,015 122,737
Operating expenses and other, net,
excluding interest expense 90,695 87,524 84,505 80,553
Restructuring charge -- -- -- --
Interest expense 7,444 7,520 6,992 6,274
Income before income taxes
and cumulative effect of accounting change 18,060 22,253 36,518 35,910
Provision for income taxes 6,909 8,450 13,848 13,814
Income before cumulative effect of accounting change 11,151 13,803 22,670 22,096
Cumulative effect of accounting change -- 1,984<Fb> -- --
Net income $ 11,151 $ 15,787 $ 22,670 $ 22,096
- ------------------------------------------------------------------------------------------------------------------------
Per Share Data
Net income $ 1.23 $ 1.71<Fb> $ 2.43 $ 2.37
Cash dividends paid .93 .92 .89 .84
Shareholders' equity $ 21.13 $ 20.88 $ 20.43 $ 18.92
- ------------------------------------------------------------------------------------------------------------------------
Ratios
Current ratio (current assets to current
liabilities) 4.0 to 1 4.7 to 1 4.2 to 1 2.9 to 1
Percent long-term debt to long-term debt and equity 27.3% 29.2% 29.7% 24.8%
Gross profit margin 27.2% 27.2% 29.5% 29.7%
Pretax profit margin 4.2% 5.2% 8.4% 8.7%
Effective tax rate 38.3% 38.0% 37.9% 38.5%
Net income margin 2.6% 3.7% 5.2% 5.3%
Return on average shareholders' equity 5.8% 8.2% 12.3% 13.0%
Return on average total assets 3.4% 4.8% 7.0% 7.4%
- ------------------------------------------------------------------------------------------------------------------------
Other Selected Data
Working capital $157,188 $161,129 $160,379 $134,964
Additions to property and equipment, net 8,770 9,889 13,159 13,537
Depreciation expense 12,872 12,578 11,743 10,313
Long-term debt, less current maturities 72,255 78,175 80,506 57,782
Total assets $332,861 $326,657 $335,173 $316,439
Average number of shares of Common Stock outstanding 9,089,365 9,217,199 9,344,748 9,329,503
Approximate number of employees 9,500 9,000 9,100 9,300
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For Years Ended January 27, January 28 January 30, January 31,
(Dollars in thousands, except per share amounts) 1990 1989 1988 1987
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Combined sales and textile service revenues $368,752 $328,134 $306,669 $291,704
Gross profit 108,150 92,629 91,648 88,956
Operating expenses and other, net,
excluding interest expense 71,837 62,784 59,552 54,540
Restructuring charge -- -- -- --
Interest expense 5,077 2,783 1,860 2,360
Income before income taxes
and cumulative effect of accounting change 31,236 27,062 30,236 32,056
Provision for income taxes 12,022 10,420 13,001 15,355
Income before cumulative effect of accounting change 19,214 16,642 17,235 16,701
Cumulative effect of accounting change -- -- -- --
Net income $ 19,214 $ 16,642 $ 17,235 $ 16,701
- ------------------------------------------------------------------------------------------------------------------------
Per Share Data
Net income $ 2.06 $ 1.79 $ 1.85 $ 1.79
Cash dividends paid .77 .73 .70 .61
Shareholders' equity $ 17.36 $ 16.09 $ 14.95 $ 13.78
- ------------------------------------------------------------------------------------------------------------------------
Ratios
Current ratio (current assets to current
liabilities) 3.4 to 1 3.0 to 1 3.1 to 1 4.3 to 1
Percent long-term debt to long-term debt and equity 23.9% 11.3% 13.5% 16.4%
Gross profit margin 29.3% 28.2% 29.9% 30.5%
Pretax profit margin 8.5% 8.3% 9.9% 11.0%
Effective tax rate 38.5% 38.5% 43.0% 47.9%
Net income margin 5.2% 5.1% 5.6% 5.7%
Return on average shareholders' equity 12.3% 11.5% 12.8% 13.5%
Return on average total assets 7.5% 7.4% 8.4% 8.8%
- ------------------------------------------------------------------------------------------------------------------------
Other Selected Data
Working capital $130,072 $104,218 $ 95,239 $101,119
Additions to property and equipment, net 12,922 6,312 16,835 9,880
Depreciation expense 9,360 8,513 7,617 7,104
Long-term debt, less current maturities 50,588 19,013 21,588 25,236
Total assets $279,168 $232,883 $216,441 $194,958
Average number of shares of Common Stock outstanding 9,327,025 9,299,105 9,335,418 9,341,814
Approximate number of employees 8,400 7,800 7,400 7,000
- ------------------------------------------------------------------------------------------------------------------------
<FN>
<Fa> Restructuring charge taken in fourth quarter of fiscal 1996. Effect on
net income per share is a reduction of $.95.
<Fb> Includes cumulative effect to February 1, 1992 of implementing SFAS No.
109, "Accounting for Income Taxes." Cumulative effect on net income per
share is $.21.
This information should be read in conjunction with the financial statements
and notes thereto appearing elsewhere in this report.
</TABLE>
- ------------------------------------------------------------------------------
<PAGE> 1
<TABLE>
Exhibit 21
Subsidiaries
------------
Registrant: Angelica Corporation, State of Incorporation: Missouri
<CAPTION>
Percentage
of Voting
Securities
State of Owned by
Name Incorporation Registrant
---- -------------- ----------
<S> <C> <C>
Angelica Realty Co. California 100%
Angelica Textile
Services, Inc. California 100%
Angelica International Ltd. Federal Corporation, Canada 100%
Angelica Textile
Services, Inc. New York 100%
Southern Service Company California 100%
Industrias Textiles El Curu Costa Rica 100%
Angelica Holdings Limited<F*> United Kingdom 100%
</TABLE>
Retail operations of the Registrant include a chain of 286 retail uniform
specialty shops operating under the umbrella name of "Life Uniform and Shoe
Shops." Generally, all shops operating in a specific state form one company
incorporated under the laws of that state. All such corporations (38) are
wholly-owned subsidiaries of the Registrant.
<F*>Parent Company of Angelica International Limited, incorporated under the
laws of the United Kingdom, all of whose voting securities are owned by Angelica
Holdings Limited.
All of the above subsidiaries are included in the consolidated financial
statements filed herewith.
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation of
our report incorporated by reference in this Form 10-K, into the Corporation's
previously filed Form S-8 Registration Statements Nos. 33-5524, 33-22850,
2-77932, 2-97291, 33-625, 33-45410 and 33-50960.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
April 22, 1997
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and
officers of Angelica Corporation (hereinafter referred to as the "Company")
hereby constitutes and appoints L.J. Young, T.M. Armstrong, and L. Linden Mann
and each of them acting singly, the true and lawful agents and attorneys, or
agent and attorney, with full powers of substitution, resubstitution and
revocation, for and in the name, place and stead of the undersigned to do any
and all things and to execute any and all instruments which said agents and
attorneys, or any of them, may deem necessary or advisable to enable the
Company to comply with the Securities Exchange Act of 1934, as amended, and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the Annual Report on Form
10-K of the Company for the fiscal year ended January 25, 1997, including
specifically, but without limiting the generality of the foregoing, full power
and authority to sign the name of each of the undersigned in the capacities
indicated below to the said Annual Report on Form 10-K to be filed with the
Securities and Exchange Commission, and to any and all amendments to said
Annual Report on Form 10-K, and each of the undersigned hereby grants to said
attorneys and agents, and to each of them singly, full power and authority to
do and perform on behalf of the undersigned every act and thing whatsoever
necessary or appropriate to be done in the premises as fully as the
undersigned could do in person, hereby ratifying and confirming all that said
attorneys and agents, or any of them, or the substitutes or substitute of them
or any of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed these presents
this 2nd day of April, 1997.
/s/ L. J. Young /s/ T. M. Armstrong
- ---------------------------------- -------------------------------------
(L.J. Young) (T.M. Armstrong)
Chairman of the Board, President Senior Vice President-
and Chief Executive Officer Finance and Administration
(Principal Executive Officer) Chief Financial Officer
(Principal Financial Officer)
/s/ L. Linden Mann
-------------------------------------
(L. Linden Mann)
Controller
(Principal Accounting Officer)
<PAGE> 2
/s/ Earle H. Harbison, Jr. /s/ Elliot H. Stein
- ---------------------------------- -------------------------------------
(Earle H. Harbison, Jr.) (Elliot H. Stein)
Director Director
/s/ Leslie F. Loewe /s/ William P. Stiritz
- ---------------------------------- -------------------------------------
(Leslie F. Loewe) (William P. Stiritz)
Director Director
/s/ Charles W. Mueller /s/ H. Edwin Trusheim
- ---------------------------------- -------------------------------------
(Charles W. Mueller) (H. Edwin Trusheim)
Director Director
/s/ William A. Peck
- ----------------------------------
(William A. Peck)
Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the consolidated financial statements for period ended January 25,
1997 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-25-1997
<PERIOD-START> JAN-28-1996
<PERIOD-END> JAN-25-1997
<CASH> 2,122
<SECURITIES> 0
<RECEIVABLES> 69,277
<ALLOWANCES> (2,645)
<INVENTORY> 159,000
<CURRENT-ASSETS> 232,412
<PP&E> 216,893
<DEPRECIATION> (114,063)
<TOTAL-ASSETS> 374,104
<CURRENT-LIABILITIES> 69,397
<BONDS> 97,417
<COMMON> 9,472
0
0
<OTHER-SE> 179,769
<TOTAL-LIABILITY-AND-EQUITY> 374,104
<SALES> 227,870
<TOTAL-REVENUES> 489,219
<CGS> 148,127
<TOTAL-COSTS> 363,936
<OTHER-EXPENSES> 101,340
<LOSS-PROVISION> 1,417
<INTEREST-EXPENSE> 9,588
<INCOME-PRETAX> 12,938
<INCOME-TAX> 4,916
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,022
<EPS-PRIMARY> .88
<EPS-DILUTED> .88
</TABLE>
<PAGE> 1
Exhibit 99.1
Exhibit to Annual Report
on Form 10-K of
Angelica Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 11-K
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
--------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ------------------to-------------------
Commission file number 1-5674
-----------------------------------------------
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
THE ANGELICA CORPORATION
RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
ANGELICA CORPORATION
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
-1-
<PAGE> 2
<TABLE>
Financial Statements and Exhibits.
- ---------------------------------
<CAPTION>
(a) Financial Statements. Pages of this
-------------------- -------------
Form 11-K
---------
<S> <C>
Report of Independent Public Accountants 5
Statement of Net Assets Available for 6-7
Plan Benefits - December 31, 1996 and
December 31, 1995
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1996
Notes to Financial Statements 9-11
Schedule I 12
Schedule II 13
<CAPTION>
(b) Exhibits.
--------
<S>
23. Consent of Independent Public Accountants.
</TABLE>
-2-
<PAGE> 3
THE ANGELICA CORPORATION
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
-3-
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1996 AND 1995
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits--December 31, 1996
Statement of Net Assets Available for Plan Benefits--December 31, 1995
Statement of Changes in Net Assets Available for Plan Benefits for the
Year Ended December 31, 1996
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
SUPPLEMENTAL SCHEDULES SUPPORTING FINANCIAL STATEMENTS:
Schedule I: Item 27a - Schedule of Assets Held for Investment Purposes--
December 31, 1996
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the
Year Ended December 31, 1996
-4-
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Angelica Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of The Angelica Corporation Retirement Savings Plan (the Plan) as
of December 31, 1996 and 1995, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1996.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the
Plan as of December 31, 1996 and 1995, and the changes in net assets
available for plan benefits for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as
listed in the accompanying table of contents, are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The fund information in
the statements of net assets available for plan benefits and the statement
of changes in net assets available for plan benefits is presented for
purposes of additional analysis rather than to present the net assets
available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
St. Louis, Missouri,
March 21, 1997
-5-
<PAGE> 6
<TABLE>
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1996
-----------------
<CAPTION>
Investment Funds
-----------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
ASSETS ----------- ---------- ---------- ----------- ---------
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 980,711 $ 980,711 $ - $ - $ -
American Balanced Fund 947,355 - 947,355 - -
MFS Growth Opportunities Fund 450,942 - 450,942 - -
Washington Mutual Investors Fund 8,364,037 - 8,364,037 - -
Commonwealth Life Insurance Company
Group Annuity Contract 2,175,198 - - 2,175,198 -
Hartford Life Insurance Company
Group Annuity Contract 5,273,460 - - 5,273,460 -
General American Life Insurance Co. 3,023,762 - - 3,023,762 -
Society National Bank MGD GIC Fund 9,135,516 - - 9,135,516 -
Loans to participants 1,460,963 - - 1,460,963 -
Boatmen's Employee Benefit Short-Term Fund 234,327 7,005 51,046 174,186 2,090
----------- ---------- ---------- ----------- -------
32,046,271 987,716 9,813,380 21,243,085 2,090
----------- ---------- ---------- ----------- -------
OTHER ASSETS:
Cash on deposit with Trustee 13,810 - 20 13,790 -
Contributions receivable (including
employer's contributions of $15,006) 133,958 6,528 46,926 78,509 1,995
Interest and dividends receivable 67,990 12,246 54,944 800 -
Loan payments receivable 28,252 - - 28,252 -
Other receivables 5,817 - 3,714 2,103 -
----------- ---------- ---------- ----------- -------
Total assets 32,296,098 1,006,490 9,918,984 21,366,539 4,085
----------- ---------- ---------- ----------- -------
LIABILITIES
-----------
LIABILITIES:
Premiums payable 4,085 - - - 4,085
Other payables 98,489 3,131 44,475 50,883 -
----------- ---------- ---------- ----------- -------
Total liabilities 102,574 3,131 44,475 50,883 4,085
----------- ---------- ---------- ----------- -------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $32,193,524 $1,003,359 $9,874,509 $21,315,656 $ -
=========== ========== ========== =========== =======
The accompanying notes are an integral part of this statement.
</TABLE>
-6-
<PAGE> 7
<TABLE>
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Investment Funds
----------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
ASSETS ----------- --------- ---------- ----------- ----------
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 903,250 $ 903,250 $ - $ - $ -
American Balanced Fund 548,021 - 548,021 - -
Massachusetts Capital Development Fund 442,317 - 442,317 - -
Washington Mutual Investors Fund 5,743,910 - 5,743,910 - -
Commonwealth Life Insurance Company
Group Annuity Contract 2,051,926 - - 2,051,926 -
Hartford Life Insurance Company
Group Annuity Contract 4,876,061 - - 4,876,061 -
LaSalle National Income Plus Fund 2,736,791 - - 2,736,791 -
Society National Bank MGD GIC Fund 9,528,757 - - 9,528,757 -
Loans to participants 1,340,431 - - 1,340,431 -
Boatmen's Employee Benefit Short-Term Fund 232,598 10,283 54,641 165,120 2,554
----------- --------- ---------- ----------- -------
28,404,062 913,533 6,788,889 20,699,086 2,554
OTHER ASSETS:
Contributions receivable (including employer's
contributions of $16,790) 140,826 7,654 39,883 91,379 1,910
Interest and dividends receivable 413,156 10,586 401,865 705 -
Loan payments receivable 14,967 - - 14,967 -
Other receivables 2,093 - - 2,093 -
----------- --------- ---------- ----------- -------
Total assets 28,975,104 931,773 7,230,637 20,808,230 4,464
----------- --------- ---------- ----------- -------
LIABILITIES
-----------
LIABILITIES:
Premiums payable 4,464 - - - 4,464
Other payables 85,052 14 16,693 68,345 -
----------- --------- ---------- ----------- -------
Total liabilities 89,516 14 16,693 68,345 4,464
----------- --------- ---------- ----------- -------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $28,885,588 $ 931,759 $7,213,944 $20,739,885 $ -
=========== ========= ========== =========== =======
The accompanying notes are an integral part of this statement.
</TABLE>
-7-
<PAGE> 8
<TABLE>
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<CAPTION>
Investment Funds
---------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
----------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 3,107,989 $ 151,796 $1,066,726 $ 1,835,473 $ 53,994
Employer contributions 515,895 26,789 160,072 329,034 -
Interest income 1,377,622 680 5,317 1,371,625 -
Dividend income 752,111 46,751 705,360 - -
Interfund transfers - (20,901) 794,904 (774,003) -
Rollovers 99,131 220 7,258 91,653 -
Change in unrealized appreciation of
investments 651,727 (86,127) 737,854 - -
Net realized gain (depreciation) on sale
of investments 62,338 4,357 57,981 - -
Other receipts 19,820 13,977 6,479 (636) -
----------- ---------- ---------- ----------- --------
Total additions 6,586,633 137,542 3,541,951 2,853,146 53,994
----------- ---------- ---------- ----------- --------
DEDUCTIONS:
Participant withdrawals 3,224,703 65,942 881,386 2,277,375 -
Life insurance premiums 53,994 - - - 53,994
----------- ---------- ---------- ----------- --------
Total deductions 3,278,697 65,942 881,386 2,277,375 53,994
----------- ---------- ---------- ----------- --------
Net increase 3,307,936 71,600 2,660,565 575,771 -
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
BEGINNING OF YEAR 28,885,588 931,759 7,213,944 20,739,885 -
----------- ---------- ---------- ----------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
END OF YEAR $32,193,524 $1,003,359 $9,874,509 $21,315,656 $ -
=========== ========== ========== =========== ========
The accompanying notes are an integral part of this statement.
</TABLE>
-8-
<PAGE> 9
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
DECEMBER 31, 1996 AND 1995
--------------------------
1. DESCRIPTION OF PLAN:
--------------------
The following description of The Angelica Corporation Retirement Savings
Plan (the Plan) is provided for general information purposes only. More
complete information regarding the Plan's provisions may be found in the
plan documents.
General
- -------
The Plan, as amended and restated, was adopted by the Board of Directors of
Angelica Corporation (the Company) to provide participants an opportunity to
defer portions of their earnings so as to provide supplementary retirement
income and a measure of economic security. The Company is the Plan
Administrator and the assets of the Plan are held in trust by Boatmen's
Trust Company (the Trustee).
Eligible Participants
- ---------------------
The participating employers in the Plan are the Company and its
subsidiaries. All full-time employees who are residents of the United
States and who have either (i) completed one year of service with the
Company and are age 21 or older or (ii) completed three years of service,
are eligible to participate in the Plan.
Contributions
- -------------
Eligible employees may contribute up to 12% of their annual compensation to
the Plan through payroll deferrals. The Company provides a matching
contribution of 1/4 of 1% for each 1% (up to a maximum of 6%) of the total
amount of compensation deferred by the participant per year, provided that
the maximum amount of matching contribution on behalf of any one participant
will be $600.
Vesting
- -------
The salary deferral and company matching contributions of each participant's
account are fully vested and nonforfeitable at all times.
Benefits
- --------
Participants are entitled to receive the balance of their accounts upon
death, total disability, retirement or termination of employment, or upon
request after reaching age 59-1/2. Participants who have suffered a
hardship (as defined by the Internal Revenue Service and the Plan) may also
withdraw all or any portion of their account balances. As of December 31,
1996 and 1995, the Plan had $512,426 and $674,167, respectively, in net
assets available for plan benefits that had been requested to be paid to
terminated participants. Although not shown separately in the accompanying
financial statements, the liability to terminated participants is shown
separately on the Form 5500.
-9-
<PAGE> 10
Loan Provision
- --------------
The Plan allows participants to borrow from their accounts, subject to
certain limitations. Such loans made prior to November 1989 bear interest
at a rate equal to the rate being earned by the Interest Income Fund at the
time the loan was made. Loans made subsequent to October 1989 bear interest
at the prime rate plus 1/2% at the time the loan was made. All loans are
secured by the participant's account and are repayable in installments by
payroll deductions.
Investment Programs
- -------------------
The investment programs of the Plan are as follows:
Upon enrollment or reenrollment, each participant shall direct that his
or her contributions be invested in one or more of the investment options
below in increments of at least 10%. Such direction may be revised by
participants on a monthly basis.
Company Stock Fund
These funds are invested in Angelica Corporation Common Stock.
Mutual Fund
Each participant may choose to invest in the American Balanced
Fund and/or the Washington Mutual Investors Fund. Participants
may no longer make contributions into the MFS Growth Opportunities
Fund (formerly Massachusetts Capital Development Fund) but are not
required to transfer their account balances elsewhere.
Interest Income Fund
This fund is invested in group annuity contracts with
Commonwealth Life Insurance Company, Hartford Life Insurance
Company, General American Life Insurance Company and Society
National Bank.
Directed Purchase of Life Insurance
Each participant has the right to direct a portion of his or her
contributions to purchase insurance on his or her life or the lives
of his or her spouse and children under age 23. Only participants
contributing to this fund as of October 31, 1989, are allowed to
continue contributions in the future.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are maintained on an accrual basis.
The Plan's investments are stated at fair value, as determined by the
Trustee, based on publicly stated price information. The "average cost"
method is used to determine the cost of securities sold. Investments in
group annuity contracts are stated at contract value.
Administrative Expenses
- -----------------------
Costs of administering the Plan are generally borne by the Company and are
not charged to the Plan.
Gains and Losses on Sale of Investments
- ---------------------------------------
In compliance with reporting regulations of the Department of Labor, the
Plan calculates the net realized gains and losses on investments sold or
distributed and unrealized appreciation and depreciation of investments
based on the market value of the assets at the beginning of the plan year or
at the time of purchase during the year.
-10-
<PAGE> 11
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of additions to and deductions from net
assets available for benefits during the reporting period. Actual results
could differ from those estimates.
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
The fair market values of individual assets that represent 5% or more of the
Plan's net assets as of December 31, 1996 and 1995, are as follows:
<TABLE>
<CAPTION>
<S> <C>
December 31, 1996:
Washington Mutual Investors Fund $8,364,037
Commonwealth Life Insurance Company Group Annuity Contract 2,175,198
Hartford Life Insurance Company Group Annuity Contract 5,273,460
General American Life Insurance Company 3,023,762
Society National Bank MGD GIC Fund 9,135,516
December 31, 1995:
Washington Mutual Investors Fund $5,743,910
Commonwealth Life Insurance Company Group Annuity Contract 2,051,926
Hartford Life Insurance Company Group Annuity Contract 4,876,061
LaSalle National Income Plus Fund 2,736,791
Society National Bank MGD GIC Fund 9,528,757
</TABLE>
4. INCOME TAX STATUS:
------------------
The Company has received a determination letter dated May 25, 1994, from the
Internal Revenue Service stating that the Plan qualifies under the Internal
Revenue Code; as such, the Plan is exempt from federal income tax, and
amounts contributed by the Company and its employees are not taxable to the
participants until distributions from the Plan are made. The Plan
Administrator believes that the Plan, as amended and as currently operating,
is in compliance with all applicable provisions of the Internal Revenue
Code.
5. TERMINATION OF THE PLAN:
------------------------
The Company reserves the right to terminate its participation in the Plan as
of any specified current or future date. While the Company has no plans to
terminate the Plan, the Tax Credit portion of the Company Stock Fund was
rolled into a separate plan, The Angelica Corporation Tax Credit Employee
Stock Ownership Plan and simultaneously terminated. The Company received an
IRS determination letter dated August 31, 1994, stating that this
termination does not affect the tax exempt status of the Plan.
Until the assets held in the Trust have been fully distributed, the Trustee
shall continue to possess all powers with which it was empowered by the
Trust Agreement and shall have all such other powers as are necessary or
appropriate for the completion of such distribution.
Upon termination of the Plan, plan assets will not be insured by the Pension
Benefit Guaranty Corporation as the Plan is not covered by Title IV of the
Employee Retirement Income Security Act of 1974. In addition, termination
of the Plan must be approved by the Internal Revenue Service.
-11-
<PAGE> 12
<TABLE>
SCHEDULE I
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1996
-----------------
<CAPTION>
Number of
Shares or
Principal
Amount Cost Fair Value
------------ ----------- -----------
<S> <C> <C> <C>
COMPANY STOCK FUND:
Angelica Corporation Common Stock <Fa> 51,279 $ 1,290,475 $ 980,711
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 7,005 7,005 7,005
----------- -----------
1,297,480 987,716
----------- -----------
MUTUAL FUND:
American Balanced Fund 65,110.328 916,430 947,355
MFS Growth Opportunities Fund 34,768.068 395,198 450,942
Washington Mutual Investors Fund 340,832.819 6,791,838 8,364,037
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 51,046 51,046 51,046
----------- -----------
8,154,512 9,813,380
----------- -----------
INTEREST INCOME FUND:
Commonwealth Life Insurance Company Group Annuity Contract $2,175,198 2,175,198 2,175,198
Hartford Life Insurance Company Group Annuity Contract $5,273,460 5,273,460 5,273,460
General American Life Insurance Company $3,023,762 3,023,762 3,023,762
Society National Bank MGD GIC Fund $9,135,516 9,135,516 9,135,516
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 174,186 174,186 174,186
Loans to participants, interest ranging from 6.5% to 9.5% <Fa> $1,460,963 1,460,963 1,460,963
----------- -----------
21,243,085 21,243,085
----------- -----------
DIRECTED PURCHASE OF LIFE INSURANCE:
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 2,090 2,090 2,090
----------- -----------
Total investments $30,697,167 $32,046,271
=========== ===========
<FN>
<Fa> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
-12-
<PAGE> 13
<TABLE>
SCHEDULE II
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS<Fa>
-----------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<CAPTION>
Purchases Sales
------------------------- ------------------------------------------------------
Number of Purchase Number of Cost of Net
Description of Asset Transactions Price Transactions Sales Price Assets Gain
- -------------------- ------------ ----------- ------------ ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Washington Mutual
Investors Fund 31 $ 3,163,945 23 $ 972,053 $ 788,491 $183,562
LaSalle National
Income Plus Fund 12 394,558 11 3,079,843 3,079,843 -
American Funds
Cash Management
Fund 39 1,245,360 39 1,245,360 1,245,360 -
Society National
Bank MGD GIC
Fund 15 2,127,866 26 3,114,904 3,114,904 -
Boatmen's Employee
Benefit Short-Term
Fund <Fb> 302 14,270,985 207 14,284,503 14,284,503 -
<FN>
<Fa> Represents transactions or a series of transactions in excess of 5% of
the fair value of plan assets at the beginning of the year.
<Fb> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
-13-
<PAGE> 14
Exhibit 23
of 11-K
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation of our report on The Angelica Corporation Retirement
Savings Plan financial statements included in this Form 11-K, into
the Corporation's previously filed Registration Statement on Form S-8
File No. 33-5524.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
April 22, 1997
-14-
<PAGE> 1
Exhibit 99.2
Exhibit to Annual Report
on Form 10-K of
Angelica Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 11-K
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
--------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ------------------to-------------------
Commission file number 1-5674
-----------------------------------------------
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
THE ANGELICA CORPORATION
COLLINWOOD 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
ANGELICA CORPORATION
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
-1-
<PAGE> 2
<TABLE>
Financial Statements and Exhibits.
- ---------------------------------
<CAPTION>
(a) Financial Statements. Pages of this
-------------------- -------------
Form 11-K
---------
<S> <C>
Report of Independent Public Accountants 5
Statement of Net Assets Available for 6-7
Plan Benefits - December 31, 1996 and
December 31, 1995
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1996
Notes to Financial Statements 9-11
Schedule I 12
Schedule II 13
<CAPTION>
(b) Exhibits.
--------
<S>
23. Consent of Independent Public Accountants.
</TABLE>
-2-
<PAGE> 3
THE ANGELICA CORPORATION
COLLINWOOD 401(k) PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
-3-
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1996 AND 1995
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits--December 31, 1996
Statement of Net Assets Available for Plan Benefits--December 31, 1995
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1996
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
SUPPLEMENTAL SCHEDULES SUPPORTING FINANCIAL STATEMENTS:
Schedule I: Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1996
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the
Year Ended December 31, 1996
-4-
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Angelica Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of The Angelica Corporation Collinwood 401(k) Plan (the Plan) as of
December 31, 1996 and 1995, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1996.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1996 and 1995, and the changes in net assets available for
plan benefits for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed
in the accompanying table of contents, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes
of additional analysis rather than to present the net assets available for
plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
St. Louis, Missouri,
March 21, 1997
-5-
<PAGE> 6
<TABLE>
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1996
-----------------
<CAPTION>
Investment Funds
--------------------------------------------
Directed
Interest Purchase
Mutual Income of Life
Total Fund Fund Insurance
--------- ------- --------- ---------
ASSETS
------
<S> <C> <C> <C> <C>
INVESTMENTS, at fair value:
American Balanced Fund $ 313 $ 313 $ - $ -
Washington Mutual Investors Fund 3,721 3,721 - -
Hartford Life Insurance Company Group
Annuity Contract 241,217 - 241,217 -
Society National Bank MGD GIC Fund 574,780 - 574,780 -
Boatmen's Employee Benefit Short-Term Fund 2,896 147 2,686 63
Loans to participants 71,169 - 71,169 -
--------- ------- --------- -------
894,096 4,181 889,852 63
OTHER ASSETS:
Contributions receivable (including
employer's contribution of $1,040) 4,792 47 4,643 102
Interest and dividends receivable 13 - 13 -
Loan payments receivable 2,097 - 2,097 -
Interfund (payable) receivable - (117) 117 -
--------- ------- --------- -------
Total assets 900,998 4,111 896,722 165
LIABILITIES
-----------
PREMIUMS PAYABLE 165 - - 165
--------- ------- --------- -------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 900,833 $ 4,111 $ 896,722 $ -
========= ======= ========= =======
The accompanying notes are an integral part of this statement.
</TABLE>
-6-
<PAGE> 7
<TABLE>
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Investment Funds
--------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
--------- ------- -------- --------- ---------
ASSETS
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 225 $ 225 $ - $ - $ -
American Balanced Fund 20 - 20 - -
Washington Mutual Investors Fund 2,233 - 2,233 - -
Hartford Life Insurance Company
Group Annuity Contract 223,039 - - 223,039 -
LaSalle National Bank Income Plus Fund 49,235 - - 49,235 -
Society National Bank MGD GIC Fund 497,455 - - 497,455 -
Boatmen's Employee Benefit Short-Term Fund 5,581 7 74 5,367 133
Loans to participants 66,330 - - 66,330 -
--------- ----- ------- --------- ------
844,118 232 2,327 841,426 133
OTHER ASSETS:
Contributions receivable (including
employer's contribution of $428) 2,516 - 35 2,413 68
Interest and dividends receivable 162 3 130 29 -
Loan payments receivable 3,651 - - 3,651 -
--------- ----- ------- --------- ------
Total assets 850,447 235 2,492 847,519 201
LIABILITIES
-----------
PREMIUMS PAYABLE 201 - - - 201
--------- ----- ------- --------- ------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 850,246 $ 235 $ 2,492 $ 847,519 $ -
========= ===== ======= ========= ======
The accompanying notes are an integral part of this statement.
</TABLE>
-7-
<PAGE> 8
<TABLE>
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<CAPTION>
Investment Funds
---------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
--------- --------- -------- --------- ----------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 66,474 $ - $ 1,059 $ 63,250 $ 2,165
Employer contributions 13,386 - 73 13,313 -
Interest income 57,630 - 4 57,626 -
Dividend income 287 9 278 - -
Interfund transfers - (227) (117) 344 -
Change in unrealized appreciation of
investments 317 - 317 - -
Net realized (loss) gain on sale of investments (12) (17) 5 - -
--------- ------- ------- --------- -------
138,082 (235) 1,619 134,533 2,165
--------- ------- ------- --------- -------
DEDUCTIONS:
Participant withdrawals 85,330 - - 85,330 -
Life insurance premiums 2,165 - - - 2,165
--------- ------- ------- --------- -------
87,495 - - 85,330 2,165
--------- ------- ------- --------- -------
Net increase (decrease) 50,587 (235) 1,619 49,203 -
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
BEGINNING OF YEAR 850,246 235 2,492 847,519 -
--------- ------- ------- --------- -------
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
END OF YEAR $ 900,833 $ - $ 4,111 $ 896,722 $ -
========= ======= ======= ========= =======
The accompanying notes are an integral part of this statement.
</TABLE>
-8-
<PAGE> 9
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
DECEMBER 31, 1996 AND 1995
--------------------------
1. DESCRIPTION OF PLAN:
--------------------
The following description of The Angelica Corporation Collinwood 401(k) Plan
(the Plan) is provided for general information purposes only. More complete
information regarding the Plan's provisions may be found in the plan
document.
General
- -------
The Plan was adopted by the Board of Directors of Angelica Corporation (the
Company) to provide participants an opportunity to defer portions of their
earnings so as to provide supplementary retirement income and a measure of
economic security. The Company is the Plan Administrator and the assets of
the Plan are held in trust by Boatmen's Trust Company (the Trustee).
Eligible Participants
- ---------------------
The participating employers in the Plan are the Company and its subsidiaries.
All full-time union employees at the Company's Collinwood, Tennessee, plant
who have either (i) completed one year of service with the Company and are
age 21 or older or (ii) completed three years of service, are eligible to
participate in the Plan.
Contributions
- -------------
Eligible employees may contribute up to 12% of their annual compensation to
the Plan through payroll deferrals. The Company provides a matching
contribution of up to five cents for each hour worked by a participant.
Vesting
- -------
The salary deferral and company matching contributions of each participant's
account are fully vested and nonforfeitable at all times.
Benefits
- --------
Participants are entitled to receive the balance of their accounts upon
death, total disability, retirement or termination of employment, or upon
request after reaching age 59-1/2. Any participants who have suffered a
hardship (as defined by the Internal Revenue Service and the Plan) may also
withdraw all or any portion of their account balances. As of December 31,
1996 and 1995, the Plan had $3,453 and $18,871, respectively, in net assets
available for plan benefits that had been requested to be paid to terminated
participants. Although not shown separately in the accompanying financial
statements, the liability to terminated participants is shown separately on
the Form 5500.
-9-
<PAGE> 10
Loan Provision
- --------------
The Plan allows participants to borrow from their accounts, subject to
certain limitations. Such loans made prior to November 1989 bear interest at
a rate equal to the rate being earned by the Interest Income Fund at the time
the loan was made. Loans made subsequent to October 1989 bear interest at
the prime rate plus 1/2% at the time the loan is made. All loans are secured
by the participant's account and are repayable in installments by payroll
deductions.
Investment Programs
- -------------------
The investment programs of the Plan are as follows:
Upon enrollment or reenrollment, each participant directs his or her
contributions to be invested in one or more of the investment options
below in increments of at least 10%. Such direction may be revised
by participants on a monthly basis.
Company Stock Fund
This fund is invested in Angelica Corporation Common Stock.
Mutual Fund
Participants may choose to invest in the American Balanced Fund
and/or the Washington Mutual Investors Fund.
Interest Income Fund
This fund is invested in group annuity contracts with Hartford Life
Insurance Company and Society National Bank.
Directed Purchase of Life Insurance
Each participant has the right to direct a portion of his or her
contributions to purchase insurance on his or her life or the lives
of his or her spouse and children under age 23. Only participants
contributing to the fund as of December 31, 1990, are allowed to
continue contributions in the future.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are maintained on an accrual basis. The
Plan's investments are stated at fair value, as determined by the Trustee,
based on publicly stated price information. The "average cost" method is
used to determine the cost of securities sold. Investments in group annuity
contracts are stated at contract value.
Administrative Expenses
- -----------------------
Costs of administering the Plan are generally borne by the Company and are
not charged to the Plan.
Gains and Losses on Sale of Investments
- ---------------------------------------
In compliance with reporting regulations of the Department of Labor, the Plan
calculates the net realized gains and losses on investments sold or
distributed and unrealized appreciation and depreciation of investments based
on the market value of the assets at the beginning of the plan year or at the
time of purchase during the year.
-10-
<PAGE> 11
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions to and deductions from net assets available
for benefits during the reporting period. Actual results could differ from
those estimates.
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
The fair market values of individual assets that represent 5% or more of the
Plan's net assets as of December 31, 1996 and 1995, are as follows:
<TABLE>
<S> <C>
December 31, 1996:
Hartford Life Insurance Company Group Annuity Contract $241,217
Society National Bank MGD GIC Fund 574,780
Loans to participants 71,169
December 31, 1995:
Hartford Life Insurance Company Group Annuity Contract $223,039
LaSalle National Bank Income Plus Fund 49,235
Society National Bank MGD GIC Fund 497,455
Loans to participants 66,330
</TABLE>
4. INCOME TAX STATUS:
------------------
The Company has received a determination letter dated October 7, 1992, from
the Internal Revenue Service stating that the Plan qualifies under the
Internal Revenue Code; as such, the Plan is exempt from federal income tax,
and amounts contributed by the Company and its employees are not taxable to
the participants until distributions from the Plan are made. The Plan
Administrator believes that the Plan, as amended and as currently operating,
is in compliance with all applicable provisions of the Internal Revenue Code.
5. TERMINATION OF THE PLAN:
-----------------------
The Company reserves the right to terminate its participation in the Plan as
of any specified current or future date.
Until the assets held in the Trust have been fully distributed, the Trustee
shall continue to possess all powers with which it was empowered by the Trust
Agreement and shall have all such other powers as are necessary or
appropriate to the completion of such distribution.
Upon termination of the Plan, plan assets will not be insured by the Pension
Benefit Guaranty Corporation as the Plan is not covered by Title IV of the
Employee Retirement Income Security Act of 1974. In addition, termination of
the Plan must be approved by the Internal Revenue Service.
-11-
<PAGE> 12
<TABLE>
SCHEDULE I
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1996
-----------------
<CAPTION>
Number of
Shares or
Principal Fair
Amount Cost Value
----------- ------ -------
<S> <C> <C> <C>
MUTUAL FUND:
American Balanced Fund 21.502 $ 311 $ 313
Washington Mutual Investors Fund 151.615 2,966 3,721
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 147 147 147
--------- ---------
3,424 4,181
--------- ---------
INTEREST INCOME FUND:
Hartford Life Insurance Company Group Annuity Contract $241,217 241,217 241,217
Society National Bank MGD GIC Fund $574,780 574,780 574,780
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 2,686 2,686 2,686
Loans to participants, interest ranging from 6.5% to 10.5% <Fa> $ 71,169 71,169 71,169
--------- ---------
889,852 889,852
--------- ---------
DIRECTED PURCHASE OF LIFE INSURANCE:
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 63 63 63
--------- ---------
Total investments $ 893,339 $ 894,096
========= =========
<FN>
<Fa> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
-12-
<PAGE> 13
<TABLE>
SCHEDULE II
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS <Fa>
------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<CAPTION>
Purchases Sales
----------------------- -------------------------------------------------
Number of Purchase Number of Sales Cost of Gain/
Description of Asset Transactions Price Transactions Price Assets (Loss)
-------------------- ------------ -------- ------------ ----- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Society National Bank MGD
GIC Fund 14 $ 89,791 16 $ 44,396 $ 44,396 $ -
Boatmen's Employee Benefit
Short-Term Fund <Fb> 116 212,107 56 214,793 214,793 -
LaSalle National Bank Income
Plus Fund 11 2,631 8 50,992 50,992 -
<FN>
<Fa> Represents transactions or a series of transactions in excess of 5% of
the fair value of plan assets at the beginning of the year.
<Fb> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
-13-
<PAGE> 14
Exhibit 23
of 11-K
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation of our report on The Angelica Corporation Collinwood
401(k) Plan financial statements included in this Form 11-K, into the
Corporation's previously filed Registration Statement on Form S-8
File No. 2-97291.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
April 22, 1997
-14-
<PAGE> 1
Exhibit 99.3
Exhibit to Annual Report
on Form 10-K of
Angelica Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 11-K
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
--------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ------------------to-------------------
Commission file number 1-5674
-----------------------------------------------
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
THE ANGELICA CORPORATION
SAVANNAH 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
ANGELICA CORPORATION
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
-1-
<PAGE> 2
<TABLE>
Financial Statements and Exhibits.
- ---------------------------------
<CAPTION>
(a) Financial Statements. Pages of this
-------------------- -------------
Form 11-K
---------
<S> <C>
Report of Independent Public Accountants 5
Statement of Net Assets Available for 6-7
Plan Benefits - December 31, 1996 and
December 31, 1995
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1996
Notes to Financial Statements 9-11
Schedule I 12
Schedule II 13
<CAPTION>
(b) Exhibits.
--------
<S>
23. Consent of Independent Public Accountants.
</TABLE>
-2-
<PAGE> 3
THE ANGELICA CORPORATION
SAVANNAH 401(k) PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
-3-
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1996 AND 1995
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits--December 31, 1996
Statement of Net Assets Available for Plan Benefits--December 31, 1995
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1996
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
SUPPLEMENTAL SCHEDULES SUPPORTING FINANCIAL STATEMENTS:
Schedule I: Item 27a - Schedule of Assets Held for Investment Purposes--
December 31, 1996
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the
Year Ended December 31, 1996
-4-
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Angelica Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of The Angelica Corporation Savannah 401(k) Plan (the Plan) as of
December 31, 1996 and 1995, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1996.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1996 and 1995, and the changes in net assets available for
plan benefits for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed
in the accompanying table of contents, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes
of additional analysis rather than to present the net assets available for
plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
St. Louis, Missouri,
March 21, 1997
-5-
<PAGE> 6
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1996
-----------------
<CAPTION>
Investment Funds
------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
-------- ------- ------ -------- ---------
ASSETS
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 975 $ 975 $ - $ - $ -
MFS Growth Opportunities Fund 1,606 - 1,606 - -
Washington Mutual Investors Fund 2,634 - 2,634 - -
American Balanced Fund 1,008 - 1,008 - -
Hartford Life Insurance Company Group
Annuity Contract 157,746 - - 157,746 -
Society National Bank MGD GIC Fund 350,102 - - 350,102 -
Boatmen's Employee Benefit Short-Term Fund 5,039 33 91 4,900 15
Loans to participants 25,704 - - 25,704 -
-------- ------ ------ -------- ------
544,814 1,008 5,339 538,452 15
OTHER ASSETS:
Contributions receivable (including employer's
contributions of $805) 4,241 5 95 4,126 15
Interest and dividends receivable 221 12 194 15 -
Loan payments receivable 1,252 - - 1,252 -
-------- ------ ------ -------- ------
Total assets 550,528 1,025 5,628 543,845 30
LIABILITIES
-----------
PREMIUMS PAYABLE 30 - - - 30
-------- ------ ------ -------- ------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $550,498 $1,025 $5,628 $543,845 $ -
======== ====== ====== ======== ======
The accompanying notes are an integral part of this statement.
</TABLE>
-6-
<PAGE> 7
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Investment Funds
-----------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
-------- ------- ------ -------- ---------
ASSETS
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 881 $ 881 $ - $ - $ -
Massachusetts Capital Development Fund 1,291 - 1,291 - -
Washington Mutual Investors Fund 1,673 - 1,673 -
Hartford Life Insurance Company Group
Annuity Contract 145,859 - - 145,859 -
LaSalle National Income Plus Fund 21,716 - - 21,716 -
Society National Bank MGD GIC Fund 273,417 - - 273,417 -
Boatmen's Employee Benefit Short-Term Fund 5,813 57 20 5,719 17
Loans to participants 27,974 - - 27,974 -
-------- ----- ------ -------- ------
478,624 938 2,984 474,685 17
OTHER ASSETS:
Contributions receivable (including employer's
contributions of $571) 3,687 5 14 3,655 13
Interest and dividends receivable 143 26 97 20 -
Loan payments receivable 732 - - 732 -
-------- ----- ------ -------- ------
Total assets 483,186 969 3,095 479,092 30
LIABILITIES
-----------
PREMIUMS PAYABLE 30 - - - 30
-------- ----- ------ -------- ------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $483,156 $ 969 $3,095 $479,092 $ -
======== ===== ====== ======== ======
The accompanying notes are an integral part of this statement.
</TABLE>
-7-
<PAGE> 8
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<CAPTION>
Investment Funds
------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
-------- ------- ------ -------- ---------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 56,784 $ 56 $1,396 $ 54,968 $ 364
Employer contributions 10,180 26 152 10,002 -
Interest income 34,061 2 3 34,056 -
Dividend income 670 46 624 - -
Change in unrealized appreciation of
investments 284 (74) 358 - -
-------- ------ ------ -------- -----
101,979 56 2,533 99,026 364
-------- ------ ------ -------- -----
DEDUCTIONS:
Participant withdrawals 34,273 - - 34,273 -
Life insurance premiums 364 - - - 364
-------- ------ ------ -------- -----
34,637 - - 34,273 364
-------- ------ ------ -------- -----
Net increase 67,342 56 2,533 64,753 -
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT BEGINNING OF YEAR 483,156 969 3,095 479,092 -
-------- ------ ------ -------- -----
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT END OF YEAR $550,498 $1,025 $5,628 $543,845 $ -
======== ====== ====== ======== =====
The accompanying notes are an integral part of this statement.
</TABLE>
-8-
<PAGE> 9
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
DECEMBER 31, 1996 AND 1995
--------------------------
1. DESCRIPTION OF PLAN:
-------------------
The following description of The Angelica Corporation Savannah 401(k) Plan
(the Plan) is provided for general information purposes only. More complete
information regarding the Plan's provisions may be found in the plan
document.
General
- -------
The Plan was adopted by the Board of Directors of Angelica Corporation (the
Company) to provide participants an opportunity to defer portions of their
earnings so as to provide supplementary retirement income and a measure of
economic security. The Company is the Plan Administrator and the assets of
the Plan are held in trust by Boatmen's Trust Company (the Trustee).
Eligible Participants
- ---------------------
The participating employers in the Plan are the Company and its subsidiaries.
All full-time union employees at the Company's Savannah, Tennessee, plant who
have either (i) completed one year of service with the Company and are age 21
or older or (ii) completed three years of service, are eligible to
participate in the Plan.
Contributions
- -------------
Eligible employees may contribute up to 12% of their annual compensation to
the Plan through payroll deferrals. The Company provides a matching
contribution of up to five cents for each hour worked by a participant.
Vesting
- -------
The salary deferral and company matching contributions of each participant's
account are fully vested and nonforfeitable at all times.
Benefits
- --------
Participants are entitled to receive the balance of their accounts upon
death, total disability, retirement or termination of employment, or upon
request after reaching age 59-1/2. Participants who have suffered a hardship
(as defined by the Internal Revenue Service and the Plan) may also withdraw
all or any portion of their account balances. As of December 31, 1996 and
1995, the Plan had $197 and $2,249, respectively, in net assets available for
plan benefits that had been requested to be paid to terminated participants.
Although not shown separately in the accompanying financial statements, the
liability to terminated participants is shown separately on the Form 5500.
-9-
<PAGE> 10
Loan Provision
- --------------
The Plan allows participants to borrow from their accounts, subject to
certain limitations. Such loans made prior to November 1989 bear interest at
a rate equal to the rate being earned by the Interest Income Fund at the time
the loan was made. Loans made subsequent to October 1989 bear interest at
the prime rate plus 1/2% at the time the loan is made. All loans are secured
by the participant's account and are repayable in installments by payroll
deductions.
Investment Programs
- -------------------
The investment programs of the Plan are as follows:
Upon enrollment or reenrollment, each participant directs his or her
contributions to be invested in one or more of the investment options below
in increments of at least 10%. Such direction may be revised by participants
on a monthly basis.
Company Stock Fund
This fund is invested in Angelica Corporation Common Stock.
Mutual Fund
Each participant may choose to invest in the American Balanced Fund
and/or the Washington Mutual Investors Fund. Participants may no
longer make contributions into the MFS Growth Opportunities Fund
but are not required to transfer their account balances elsewhere.
Interest Income Fund
This fund is invested in group annuity contracts with Hartford Life
Insurance Company and Society National Bank.
Directed Purchase of Life Insurance
Each participant has the right to direct a portion of his or her
spouse and children under age 23. Only participants contributing
to the fund as of December 31, 1990, are allowed to continue
contributions in the future.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are maintained on an accrual basis. The
Plan's investments are stated at fair value, as determined by the Trustee,
based on publicly stated price information. The "average cost" method is
used to determine the cost of securities sold. Investments in group annuity
contracts are stated at contract value.
Administrative Expenses
- -----------------------
Costs of administering the Plan are generally borne by the Company and are
not charged to the Plan.
Gains and Losses on Sale of Investments
- ---------------------------------------
In compliance with reporting regulations of the Department of Labor, the Plan
calculates the net realized gains and losses on investments sold or
distributed and unrealized appreciation and depreciation of investments based
on the market value of the assets at the beginning of the plan year or at the
time of purchase during the year.
-10-
<PAGE> 11
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions to and deductions from net assets available
for benefits during the reporting period. Actual results could differ from
those estimates.
3. INVESTMENTS:
-----------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
The fair market values of individual assets that represent 5% or more of the
Plan's net assets as of December 31, 1996 and 1995, are as follows:
<TABLE>
<S> <C>
December 31, 1996:
Hartford Life Insurance Company Group Annuity Contract $157,746
Society National Bank MGD GIC Fund 350,102
December 31, 1995:
Hartford Life Insurance Company Group Annuity Contract $145,859
Society National Bank MGD GIC Fund 273,417
Loans to participants 27,974
</TABLE>
4. INCOME TAX STATUS:
-----------------
The Company has received a determination letter dated October 6, 1992, from
the Internal Revenue Service stating that the Plan qualifies under the
Internal Revenue Code; as such, the Plan is exempt from federal income tax,
and amounts contributed by the Company and its employees are not taxable to
the participants until distributions from the Plan are made. The Plan
Administrator believes that the Plan, as amended and as currently operating,
is in compliance with all applicable provisions of the Internal Revenue Code.
5. TERMINATION OF THE PLAN:
-----------------------
The Company reserves the right to terminate its participation in the Plan as
of any specified current or future date.
Until the assets held in the Trust have been fully distributed, the Trustee
shall continue to possess all powers with which it was empowered by the Trust
Agreement, and shall have all such other powers as are necessary or
appropriate to the completion of such distribution.
Upon termination of the Plan, plan assets will not be insured by the Pension
Benefit Guaranty Corporation as the Plan is not covered by Title IV of the
Employee Retirement Income Security Act of 1974. In addition, termination of
the Plan must be approved by the Internal Revenue Service.
-11-
<PAGE> 12
SCHEDULE I
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1996
-----------------
<CAPTION>
Number of
Shares or
Principal Fair
Amount Cost Value
--------- -------- --------
<S> <C> <C> <C>
COMPANY STOCK FUND:
Angelica Corporation Common Stock <Fa> 51 $ 1,342 $ 975
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 33 33 33
-------- --------
1,375 1,008
-------- --------
MUTUAL FUND:
MFS Growth Opportunities Fund 123.851 1,488 1,606
Washington Mutual Investors Fund 107.324 2,054 2,634
American Balanced Fund 69.302 1,018 1,008
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 91 91 91
-------- --------
4,651 5,339
-------- --------
INTEREST INCOME FUND:
Hartford Life Insurance Company Group Annuity Contract $157,746 157,746 157,746
Society National Bank MGD GIC Fund $350,102 350,102 350,102
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 4,900 4,900 4,900
Loans to participants, interest ranging from 6.5% to
10.5% <Fa> $ 25,704 25,704 25,704
-------- --------
538,452 538,452
-------- --------
DIRECTED PURCHASE OF LIFE INSURANCE:
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 15 15 15
-------- --------
Total investments $544,493 $544,814
======== ========
<FN>
<Fa> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
-12-
<PAGE> 13
SCHEDULE II
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS <Fa>
------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<CAPTION>
Purchases Sales
------------------------ ---------------------------------------------
Number of Purchase Number of Sales Cost of Gain/
Description of Asset Transactions Price Transactions Price Assets (Loss)
-------------------- ------------ -------- ------------ ----- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Society National Bank MGD
GIC Fund 14 $ 81,936 13 $ 23,857 $ 23,857 $ -
Boatmen's Employee Benefit
Short-Term Fund <Fb> 121 133,852 52 134,627 134,627 -
<FN>
<Fa> Represents transactions or a series of transactions in excess of 5% of
the fair value of plan assets at the beginning of the year.
<Fb> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
-13-
<PAGE> 14
Exhibit 23
of 11-K
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation of our report on The Angelica Corporation Savannah
401(k) Plan financial statements included in this Form 11-K, into the
Corporation's previously filed Registration Statement on Form S-8
File No. 33-625.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
April 22, 1997
-14-
<PAGE> 1
Exhibit 99.4
Exhibit to Annual Report
on Form 10-K of
Angelica Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 11-K
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
--------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ------------------to-------------------
Commission file number 1-5674
-----------------------------------------------
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
THE ANGELICA CORPORATION
MISSOURI PLANTS 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
ANGELICA CORPORATION
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
-1-
<PAGE> 2
<TABLE>
Financial Statements and Exhibits.
- ---------------------------------
<CAPTION>
(a) Financial Statements. Pages of this
-------------------- -------------
Form 11-K
---------
<S> <C>
Report of Independent Public Accountants 5
Statement of Net Assets Available for 6-7
Plan Benefits - December 31, 1996 and
December 31, 1995
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1996
Notes to Financial Statements 9-11
Schedule I 12
Schedule II 13
<CAPTION>
(b) Exhibits.
--------
<S>
23. Consent of Independent Public Accountants.
</TABLE>
-2-
<PAGE> 3
THE ANGELICA CORPORATION
MISSOURI PLANTS 401(k) PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
-3-
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1996 AND 1995
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits--December 31, 1996
Statement of Net Assets Available for Plan Benefits--December 31, 1995
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1996
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
SUPPLEMENTAL SCHEDULES SUPPORTING FINANCIAL STATEMENTS:
Schedule I: Item 27a - Schedule of Assets Held for Investment
Purposes--December 31, 1996
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the Year
Ended December 31, 1996
-4-
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Angelica Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of The Angelica Corporation Missouri Plants 401(k) Plan (the Plan)
as of December 31, 1996 and 1995, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1996.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1996 and 1995, and the changes in net assets available for
plan benefits for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed
in the accompanying table of contents, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosures under the
Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes
of additional analysis rather than to present the net assets available for
plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
St. Louis, Missouri,
March 21, 1997
-5-
<PAGE> 6
<TABLE>
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1996
-----------------
<CAPTION>
Investment Funds
---------------------------------------------
Company Interest
Stock Mutual Income
Total Fund Fund Fund
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 10,653 $ 10,653 $ - $ -
American Balanced Fund 1,277 - 1,277 -
Washington Mutual Investors Fund 31,368 - 31,368 -
Hartford Life Insurance Company Group Annuity
Contract 58,878 - - 58,878
Society National Bank MGD GIC Fund 134,825 - - 134,825
Boatmen's Employee Benefit Short-Term Fund 3,380 263 688 2,429
Loans to participants 9,006 - - 9,006
-------- -------- -------- --------
249,387 10,916 33,333 205,138
OTHER ASSETS:
Contributions receivable 2,818 97 608 2,113
Interest and dividends receivable 144 134 2 8
Loan payments receivable 314 - - 314
-------- -------- -------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $252,663 $ 11,147 $ 33,943 $207,573
======== ======== ======== ========
The accompanying notes are an integral part of this statement.
</TABLE>
-6-
<PAGE> 7
<TABLE>
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Investment Funds
---------------------------------------------
Company Interest
Stock Mutual Income
Total Fund Fund Fund
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 11,726 $ 11,726 $ - $ -
American Balanced Fund 109 - 109 -
Washington Mutual Investors Fund 10,538 - 10,538 -
Hartford Life Insurance Company Group Annuity
Contract 54,441 - - 54,441
Society National Bank MGD GIC Fund 101,744 - - 101,744
Boatmen's Employee Benefit Short-Term Fund 12,650 304 414 11,932
Loans to participants 5,068 - - 5,068
-------- -------- -------- --------
196,276 12,030 11,061 173,185
OTHER ASSETS:
Contributions receivable 2,935 181 352 2,402
Interest and dividends receivable 803 135 613 55
Loan payments receivable 98 - - 98
-------- -------- -------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $200,112 $ 12,346 $ 12,026 $175,740
======== ======== ======== ========
The accompanying notes are an integral part of this statement.
</TABLE>
-7-
<PAGE> 8
<TABLE>
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<CAPTION>
Investment Funds
---------------------------------------------
Company Interest
Stock Mutual Income
Total Fund Fund Fund
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 57,587 $ 3,478 $ 8,122 $ 45,987
Interest income 12,915 19 18 12,878
Dividend income 2,636 580 2,056 -
Interfund transfers - (4,018) 10,971 (6,953)
Change in unrealized appreciation of investments 438 (868) 1,306 -
Net realized (loss) gain on sale of investments (229) (237) 8 -
-------- -------- -------- --------
73,347 (1,046) 22,481 51,912
DEDUCTION- Participant withdrawals 20,796 153 564 20,079
-------- -------- -------- --------
Net increase (decrease) 52,551 (1,199) 21,917 31,833
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
BEGINNING OF YEAR 200,112 12,346 12,026 175,740
-------- -------- -------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
END OF YEAR $252,663 $ 11,147 $ 33,943 $207,573
======== ======== ======== ========
The accompanying notes are an integral part of this statement.
</TABLE>
-8-
<PAGE> 9
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
DECEMBER 31, 1996 AND 1995
--------------------------
1. DESCRIPTION OF PLAN:
--------------------
The following description of The Angelica Corporation Missouri Plants 401(k)
Plan (the Plan) is provided for general information purposes only. More
complete information regarding the Plan's provisions may be found in the plan
document.
General
- -------
The Plan was adopted by the Board of Directors of Angelica Corporation (the
Company) to provide participants an opportunity to defer portions of their
earnings so as to provide supplementary retirement income and a measure of
economic security. The Company is the Plan Administrator and the assets of
the Plan are held in trust by Boatmen's Trust Company (the Trustee).
Eligible Participants
- ---------------------
The participating employers in the Plan are the Company and its subsidiaries.
All full-time union employees at the Company's Missouri plants who have
either (i) completed one year of service with the Company and are age 21 or
older or (ii) completed three years of service, are eligible to participate
in the Plan.
Contributions
- -------------
Eligible employees may contribute up to 12% of their annual compensation to
the Plan through payroll deferrals.
Vesting
- -------
The salary deferral contributions of each participant's account are fully
vested and nonforfeitable at all times.
Benefits
- --------
Participants are entitled to receive the balance of their accounts upon
death, total disability, retirement or termination of employment, or upon
request after reaching age 59-1/2. Any participants who have suffered a
hardship (as defined by the Internal Revenue Service and the Plan) may also
withdraw all or any portion of their account balances. As of December 31,
1996 and 1995, the Plan had $-0- and $1,462, respectively, in net assets
available for plan benefits that had been requested to be paid to terminated
participants. Although not shown separately in the accompanying financial
statements, the liability to terminated participants is shown separately on
the Form 5500.
Loan Provision
- --------------
The Plan allows participants to borrow from their accounts, subject to
certain limitations. Loans bear interest at the prime rate plus 1/2% at the
time the loan was made. All loans are secured by the participant's account
and are repayable in installments by payroll deductions.
-9-
<PAGE> 10
Investment Programs
- -------------------
The investment programs of the Plan are as follows:
Upon enrollment or reenrollment, each participant directs his or her
contributions to be invested in one or more of the investment options
below in increments of at least 10%. Such direction may be revised by
participants on a monthly basis.
Company Stock Fund
This fund is invested in Angelica Corporation Common Stock.
Mutual Fund
Participants may choose to invest in the Washington Mutual
Investors Fund and/or the American Balanced Fund.
Interest Income Fund
This fund is invested in group annuity contracts with Hartford
Life Insurance Company and Society National Bank.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are maintained on an accrual basis. The
Plan's investments are stated at fair value, as determined by the Trustee,
based upon publicly stated price information. The "average cost" method is
used to determine the cost of securities sold. Investments in group annuity
contracts are stated at contract value.
Administrative Expenses
- -----------------------
Costs of administering the Plan are generally borne by the Company and are
not charged to the Plan.
Gains and Losses on Sale of Investments
- ---------------------------------------
In compliance with reporting regulations of the Department of Labor, the Plan
calculates the net realized gains and losses on investments sold or
distributed and unrealized appreciation and depreciation of investments based
on the market value of the assets at the beginning of the plan year or at the
time of purchase during the year.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions to and deductions from net assets available
for benefits during the reporting period. Actual results could differ from
those estimates.
-10-
<PAGE> 11
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
The fair market values of individual assets that represent 5% or more of the
Plan's net assets as of December 31, 1996 and 1995, are as follows:
<TABLE>
<S> <C>
December 31, 1996:
Washington Mutual Investors Fund $ 31,368
Hartford Life Insurance Group Company Annuity Contract 58,878
Society National Bank MGD GIC Fund 134,825
December 31, 1995:
Angelica Corporation Common Stock $ 11,726
Washington Mutual Investors Fund 10,538
Hartford Life Insurance Group Company Annuity Contract 54,441
Society National Bank MGD GIC Fund 101,744
Boatmen's Employee Benefit Short-Term Fund 12,650
</TABLE>
4. INCOME TAX STATUS:
------------------
The Company has received a determination letter dated October 6, 1992, from
the Internal Revenue Service stating that the Plan qualifies under the
Internal Revenue Code; as such, the Plan is exempt from federal income tax,
and amounts contributed by the employees are not taxable to the participants
until distributions from the Plan are made. The Plan Administrator believes
that the Plan, as amended and as currently operating, is in compliance with
all applicable provisions of the Internal Revenue Code.
5. TERMINATION OF THE PLAN:
------------------------
The Company reserves the right to terminate its participation in the Plan as
of any specified current or future date.
Until the assets held in the Trust have been fully distributed, the Trustee
shall continue to possess all powers with which it was empowered by the Trust
Agreement and shall have all such other powers as are necessary or
appropriate to the completion of such distribution.
Upon termination of the Plan, plan assets will not be insured by the Pension
Benefit Guaranty Corporation as the Plan is not covered by Title IV of the
Employee Retirement Income Security Act of 1974. In addition, termination of
the Plan must be approved by the Internal Revenue Service.
-11-
<PAGE> 12
SCHEDULE I
<TABLE>
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1996
-----------------
<CAPTION>
Number of
Shares or
Principal Fair
Amount Cost Value
---------- -------- --------
<S> <C> <C> <C>
COMPANY STOCK FUND:
Angelica Corporation Common Stock <Fa> 557 $ 13,646 $ 10,653
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 263 263 263
-------- --------
13,909 10,916
-------- --------
MUTUAL FUND:
American Balanced Fund 87.782 1,293 1,277
Washington Mutual Investors Fund 1,278.255 28,423 31,368
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 688 688 688
-------- --------
30,404 33,333
-------- --------
INTEREST INCOME FUND:
Hartford Life Insurance Company Group Annuity Contract $ 58,878 58,878 58,878
Society National Bank MGD GIC Fund $ 134,825 134,825 134,825
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 2,429 2,429 2,429
Loans to participants, interest ranging from 6.5% to 9.5% <Fa> $ 9,006 9,006 9,006
-------- --------
205,138 205,138
-------- --------
Total investments $249,451 $249,387
======== ========
<FN>
<Fa> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
-12-
<PAGE> 13
SCHEDULE II
<TABLE>
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS <Fa>
------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<CAPTION>
Purchases Sales
----------------------- ------------------------------------------
Number of Purchase Number of Purchase Cost of
Transactions Price Transactions Price Assets Gain
------------ -------- ------------ -------- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Description of Asset
--------------------
Washington Mutual Investors
Fund 22 $19,887 2 $ 383 $ 332 $51
Society National Bank MGD
GIC Fund 13 46,880 10 21,348 21,348 -
Boatmen's Employee Benefit
Short-Term Fund <Fb> 127 87,225 65 96,330 96,330 -
<FN>
<Fa> Represents transactions or a series of transactions in excess of 5% of
the fair value of plan assets at the beginning of the year.
<Fb> Also a party-in-interest.
</TABLE>
The accompanying notes are an integral part of this schedule.
-13-
<PAGE> 14
Exhibit 23
of 11-K
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation of our report on The Angelica Corporation Missouri
Plants 401(k) Plan financial statements included in this Form 11-K,
into the Corporation's previously filed Registration Statement on
Form S-8 File No. 33-45410.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
April 22, 1997
14
